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                         THE MALAYSIAN INSTITUTE OF ACCOUNTANTS                                                             *

                                                                  AUGUST 2009
                                                                    Vol. 22 No. 8

                                                                                           It would seem that the whole world is
                                                                                           now in recession, but the fact of the
                                                                                           matter is, there have been pockets of it

                                                                                           here and there at various times and in
                                                                                           various countries (like Japan, for
                                                                                           instance) on different continents, which
                                                                                           slipped under the collective radar.

A Monthly Publication of the Malaysian Institute of Accountants    +                The future
                                                                                    of business    +       AQuR eases
                                                                                                           ISQC 1 Compliance
        Contents                            AUGUST 2009

                                           editor’s note
                                      7    Catalyst for Change

                                      8    reCession 101 It would seem that the whole world is now
                                           in recession, but the fact of the matter is, there have been pockets
                                           of it here and there at various times and in various countries (like
                                           Japan, for instance) on different continents, which slipped under
                                           the collective radar.
                                      12   top tips for reCession-proofing your
                                           business While there is no silver bullet to recession-proof your
                                           business, there are some things you can do to manage the business
                                           through the difficult times and position it for future growth.
                                      16   Counting the human Cost
                                      18   green salvation To alleviate the economic crisis,
                                           governments have scrambled to roll out massive stimulus packages,
                                           the bulk of which comprise textbook solutions.
                                      22   buDget 2010 wishlist

                                      24   Delivering CreDibility If you ask Nik Mohd. Hasyudeen
                                           Yusoff what MIA is, he is likely to respond with what it isn’t: “MIA
                                           is not a country club to me; it’s a body dedicated to building the
                                           profession and its credibility.”

                                      28   aQur eases isQC1 ComplianCe Baffled by ISQC 1?
                                           The new AQuR (Audit Quality Rating) portal will help MIA members
                                           comply with International Standards on Quality Control (ISQC) 1,
                                           which will be instrumental to gaining MIA’s support when renewing
                                           audit licences.

                                      30   worlD news
                                      31   ifaC news

2   accountants today | august 2009

         august 2009 | accountants today   3
        Contents                            AUGUST 2009

                                      32   unlimiteD potential? In March 2009, the Companies
                                           Commission of Malaysia (CCM) issued a Draft Bill on Limited Liability
                                           Partnerships (LLP) for public consultation. By introducing this LLP,
                                           the government intends to provide an alternative avenue of doing
                                           business and reduce the cost of doing business in Malaysia.

                                      36   tax impliCations of Cross-borDer leasing

                                      40   the future of business Fluidity and versatility will
                                           be the hallmarks of sustainable businesses. Trust will be a key
                                           component of business partnerships.
                                      44   islam in vogue

                                      48   book review

                                      50   wrist Cultist A combination of magnificent art,
                                           engineering and design, watches remain men’s luxurious display
                                           when it comes to style and fashion.
                                      52   full CirCle At some point in life, we’ve all thought of
                                           leaving the corporate world in pursuit of more personal and
                                           fulfilling dreams. Well, while some of us are dreaming away, one
                                           person has made it a reality.
                                      56   Cuisine with a ConsCienCe

                                      60   the sounD of silenCe Away from the beaches and
                                           the surfer crowds, the Gold Coast hinterland is a welcome reprieve
                                           for solitude and stunning sceneries.

                                      64   tweet, tweet! Everyone’s on the social networking
                                           bandwagon these days. From Twitter to Facebook, Flickr to
                                           YouTube, everyone has a say and anyone can play.

                                      67   mpDC training programmes

4   accountants today | august 2009

         august 2009 | accountants today   5
                                                                  mia Council
                                                                  Nik Mohd. Hasyudeen Yusoff (until 15 July 2009)
                                                                  Datuk Abdul Samad Haji Alias (Dr.) (until 15 July 2009)
     Vision and Mission                                           Accountant General
                                                                  Datuk Mohd. Salleh Mahmud
     MIA’S VISION                                                 Deputy Accountant General, Corporate                      Editorial advisory Board
     n To be a globally recognised and respect-                   Hajjah Jamela Mohd Syed ( Represented by Er Beng Kiong)
                                                                                                                            Nik Mohd. Hasyudeen Yusoff (until 15 July 2009)
       ed business partner committed to na-                       Council Members                                           Datuk Abdul Samad Haji Alias (Dr.) (until 15 July 2009)
                                                                  Abdul Halim Husin                                         Tuan Haji Rosli Abdullah
                                                                  Abdul Rahim Abdul Hamid
                                                                  Abraham Verghese                                          Editor
     MIA’S MISSION                                                Ooi Thiam Poh, Alex                                       Anuja Ravendran
     n To develop, support and monitor quality                    Kang Wei Geih, Billy
                                                                  Chandra Mohan Balasubramaniam                             Communications Executives
       and expertise consistent with global best                  Chen Voon Hann                                            Azriatushaida Ahmad
       practice in the accountancy profession                     Christina Constance Foo                                   P. Mohana Poopathi
       for the interest of stakeholders.                          Datin Dr. Hasnah Haji Haron
                                                                  Datuk Ahmad Johan Mohammad Raslan                         Writers
                                                                  Datuk Gan Ah Tee                                          Nazatul Izma
                                                                  Datuk Mohd Nasir Ahmad                                    Majella Gomes
     The Malaysian Institute of Accountants is                    Datuk Nordin Baharuddin                                   Anis Ramli
     a statutory body set up under the Accoun-                    Datuk Nur Jazlan Tan Sri Mohamed                          Ng Poh Ling
     tants Act 1967 to regulate and develop the                   Dr. Norman Mohd Salleh
                                                                  Lam Kee Soon
     accountancy profession in Malaysia.                          Lee Yee Chong
     The functions of the Institute are, inter alia:              Liew Kim Yuen
     (a) To regulate the practice of the accoun-                  Mohamed Raslan Abdul Rahman                               mia Branches
                                                                  Mohammad Faiz Mohammad Azmi
         tancy profession in Malaysia;                            Hajjah Dr. Kalsom Salleh                                  BRANCH                 CHAIRMAN
     (b) To promote in any manner it thinks fit,                  Prof. Madya Dr. Ku Norizah Ku Ismail                      Johor
         the interests of the accountancy profes-                 Prof. Madya Dr. Zulkarnain Mohd Sori                      Johor Bahru            Choong Shin Cheong, Roland
                                                                  Soh Siong Hoon, Sam                                       Tel: 07-227 0369       Fax: 07-222 0391
         sion in Malaysia;
                                                                  Seow Yoo Lin                                              Kedah & Perlis
     (c) To provide for the training and education                Oong Kee Leong, Stephen                                   Alor Setar             Yong See Sing
         by the Institute or any other body, of per-              Dr. Thillaisundaram Arumugam                              Tel: 04-735 5388       Fax: 04-731 0388
         sons practising or intending to practise                 Uthaya Kumar K Vivekananda
                                                                  Yeo Tek Ling                                              Kelantan
         the profession;                                                                                                    Kota Bahru             Leong Cheok Hoo
     (d) To determine the qualifications of per-                  CEO / Registrar                                           Tel: 09-744 4027       Fax: 09-744 2840
         sons for admission as members; and                       Tuan Haji Rosli Abdullah                                  Melaka
     (e) To approve, regulate and supervise the                   Executive Director                                        Melaka                 Mohd Hisham Tambi Ahmad
         conduct of the Qualifying Examination.                   Ho Foong Moi                                              Tel: 06-292 2154       Fax: 06-292 2153
                                                                                                                            Negeri Sembilan
                                                                                                                            Seremban               Koh Kea Yam
                                                                  publisher                                                 Tel: 06-762 3585       Fax: 06-762 3585
                                                                  Malaysian Institute of Accountants                        Pahang
                                                                  Dewan Akauntan                                            Kuantan                Yau Hun Ling
Accountants Today is the official publication of the Malaysian    2 Jalan Tun Sambanthan 3,                                 Tel: 09-513 8333       Fax: 09-514 1988
                                                                  Brickfields, 50470 Kuala Lumpur
Institute of Accountants (MIA) and is distributed to all mem-                                                               Penang
                                                                  Tel: +603-2279 9200
bers of the Institute. The views expressed in this magazine are                                                             Penang                 Ooi Kok Seng
                                                                  Fax: +603-2274 1783, 2273 1016
not necessarily those of the MIA or its Council. Contributions                                                              Tel: 04-261 3320       Fax: 04-261 3321
including letters to the Editor and comments on articles ap-                                                                Perak
pearing in the magazine are welcomed and should be sent to                                                                  Ipoh                   Lam Weng Keat
the Editor as addressed below. All materials without prejudice    publishing consultant                                     Tel: 05-253 1188       Fax: 05-255 8818
appearing in Accountants Today are copyright and cannot be                                                                  Sabah
                                                                  Executive Mode Sdn Bhd (317453-P)
reproduced in whole or in part without written permission         Tel: +603-7118 3200, 3205, 3230                           Kota Kinabalu          Goh Chee San
from the Editor.                                                  Fax: +603-7118 3220                                       Tel: 088-261 291       Fax: 088-261 290
                                                                  e-mail:                Sarawak
                                                                  web:                             Kuching                Chin Chee Kong
Editor, Accountants Today, Dewan Akauntan,
                                                                                                                            Tel: 082-418 427       Fax: 082-417 427
2 Jalan Tun Sambanthan 3, Brickfields,                            printer
50470 Kuala Lumpur, Malaysia                                                                                                Terengganu
                                                                  BHS Book Printing Sdn Bhd (95134-K)                       Kuala Terengganu       Tuan Haji Mohd. Ali Abbas
                                                                  Lot 17-22 & 17-23, Jalan Satu, Bersatu Industrial Park    Tel: 09-622 3359       Fax: 09-622 6040
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Tel: +603-2279 9200, Fax: +603-2274 1783                          Tel: +603-9076 0816, 9076 0825, 9074 7558
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url:                                               e-mail:

6    accountants today | august 2009
                                   editor’s note

                                   Catalyst for Change
                                             ffective August 2009, MIA re-                      change and boosting energy security.
                                             invents Accountants Today. We                      We also offer companies tips on how to
                                             are hopeful that the revamped                      recession-proof their business.
                                   magazine can be a platform to inspire
                                   mindset change in order to take the                          Rest and relaxation help reduce reces-
                                   profession and its members forward in                        sion and job-related stress. We have
                                   a competitive marketplace.                                   expanded our lifestyle pages to offer
The task was to refresh
                                                                                                insights into how to live better. See a dif-
the publication to give            The task was to refresh the publication                      ferent side of Brisbane, explore organic
members what they                  to give members what they want: an at-                       restaurants and get in tune with tweet-
want: an attractive                tractive reader-friendly magazine that                       ing, the social networking phenomenon.
reader-friendly magazine           combines good reporting on relevant
that combines good                 issues with coverage of enterprise, pro-                     This issue is just the beginning. As we
reporting on relevant              fessional and personal development. In-                      proceed, we hope to become a respect-
                                   formation can change mindsets for the                        ed guide for professional and personal
issues with coverage of
                                   better, and we hope to deliver through a                     development. People ignite progress,
enterprise, professional           fusion of eye-candy and substance.                           which is sparked by mindset change.
and personal                                                                                    As our members advance, so will the
development.                       The recession and its impact on busi-                        accountancy profession, which in turn
                                   nesses and individuals are still top of                      should spur the Malaysian services sec-
                                   the agenda. In “Recession 101”, we offer                     tor and subsequently the economy to a
                                   insights from global authorities on pos-                     higher plane. n
                                   sible economic scenarios going ahead.
                                   Unorthodox thinking is needed to cope                        EDITOR
                                   with     the     unprecedented           economic
                                   downturn, and green stimulus pack-
                                   ages could be an option for generating
                                   long-term prosperity and jobs as devel-
                                   oped nations “decarbonise” their econo-
                                   mies for the sake of alleviating climate

                                   A key element in the world of publishing is what readers have to say. We want to hear from you on just about anything that
     letters to the editor /////   appears in each issue of Accountants Today. Why not drop us a line now? e-mail:

                                                                                                              august 2009 | accountants today                   7
economy | COVER STORY

          Majella Gomes


8   accountants today | august 2009
                                                                                                                  RECESSION 101


                   What brought it on?                             lems brought on by global imbalances and mar-
                                                                   ket excesses.
            The first rumblings were heard when the Amer-              Consequently, the questions on the minds of
            ican mortgage market started to show signs             many are “How long will this situation last?” and
            of strain. Defaults on subprime mortgages,             “What do we do?” There is no denying the fact
            brought about by easy credit, low interest rates       that this will be a long, deep recession, worse
            and a general denial of the risks inherent in such     than anything anyone who weathered the last
            systems, led to the collapse of the real estate        three, has seen.
                 At that time, subprime loans were estimated           the Malaysian situation
            to be only about US$700 billion, but as one finan-
            cial or real estate institution after another (Bear    Initially, the Malaysian outlook was sunny,
            Stearns, Fannie Mae, Freddie Mac, Lehman               with announcements that our economy was ad-
            Brothers) went belly-up, the debt grew, becom-         equately buffered due to our large reserves. Al-
            ing less and less manageable. It rapidly deterio-      though forecasts predicted a contraction of the
            rated into a crisis of the whole US financial sys-     economy, it was deemed manageable, and not
            tem. A government bailout was inevitable.              something to be unduly worried about.
                 Economists claim that the signs of impend-            But again, applying the laws of globalisation,
            ing doom were apparent as long ago as 2006 or          and taking into consideration that the size of the
            2007, but the going was good then, so every-           US economy makes it practically every coun-
            body ignored them. Credit was cheap, anyone            try’s major trading partner, this was being na-
            could have anything they wanted, and the only          ively optimistic. Malaysia, which is primarily an
            way to live was high on the hog.                       export-oriented economy, is vulnerable because
                 It was a time of instant gratification, and       its major trading partners are the US, Japan and
            money was no object, even to the people who            the UK – which have all declared themselves in
            didn’t have it. And therein lay the problem: it was    recession.
            all essentially a case of spending money that we           As an example, the US is the largest market
            didn’t have, in the hope of making more money          for Malaysian furniture manufacturers. When
            that didn’t exist, without any thought at all of the   the subprime problem began its downward spi-
            implications for the global economy.                   ral, and homeowners defaulted on their loans,
                 Many economists point to the fact that this       the furniture market took a major hit. Production
            recession is the manifestation of a systemic cri-      was cut drastically as orders fell. Consequently,
            sis, and not caused by fraud or individual action.     Malaysian manufacturers had to scramble to
            This is the result of the compounding of prob-         find new markets or risk losing everything.

                                                                                               august 2009 | accountants today   9

                           not saving Makes for                              because that is the only way out of this recession.
                                rainy days                                   In November 2008, the Malaysian government
                                                                             announced a RM7 billion stimulus package. It is
                     Because credit has been cheap in the world’s            hoped that the bulk of this will find its way into
                     largest economies, people have found no reason          developing or improving infrastructure for the
                     to save. In the US, for instance, cash lost its roy-    public good, like alternative energy, health facili-
                     al status a long time ago – replaced with plastic       ties, and education.
                     money that just racked up more and more debt                Besides stimulating the domestic economy,
                     for people who should never have been given             a government that spends more is likely to be
                     credit in the first place.                              viewed with a friendly eye by foreign investors,
                         This ability to afford anything built a false       and right now it is imperative to attract foreign
                     sense of complacency which extended way be-             funds. The government also needs to seriously
                     yond anybody’s worst nightmares. Today, the             consider investing in technology as a long-term
                     US lacks savings and is in dire deficit, while Chi-     strategy to diversify the economy, and put poli-
                     na, which has a tradition of saving, is still able to   cies in place that support this.
                     offer loans although it is itself in recession.             With so many countries having already de-
                         The domestic economies of some countries,           clared their respective economies in recession,
                     boosted by prudent fiscal policies and some-


                     times the lack of financial instruments, may            foreign investment will dwindle, as companies
                     weather the worst of the crisis. For instance,          investing abroad cut back or withdraw from

                     while the US, the world’s biggest economy, is           markets. International investors will think twice
                     still reeling from subprime problems, and loom-         before entering foreign markets, and world trade
                     ing layoffs, retrenchments and general econom-          will decline. This will in turn affect per capita in-
                     ic battering, China and India, the most populous        come in the countries which enjoyed foreign in-
                     countries on earth, have the internal resources         vestment before.
                     to absorb the vagaries of the world economy.                Governments will have less to spend but at
                          In fact, the majority of countries in the Asia     this critical time, major government intervention
                     Pacific region are stronger today than they were        is necessary. Social security structures need to
                     a decade ago, during the last recession. How-           be put in place, or the poor will suffer. There is
                     ever, almost all countries have declared their          no denying that interventions now may be pain-
                     economies in recession, and experts generally           ful at best, and too late at worst, but interven-
                     agree that this is not the time for denial. Unlike      tions – in the form of stimulus packages – are
                     the Asian financial crisis of 1997-98, we will not      needed nevertheless.
                     be able to export ourselves out of this recession.
                                                                                   soMe Will suffer More
                           tiMe to institute open                                      than others
                              Wallet season
                                                                             The “poorest of the poor” are always the first
                     But we still have to spend, the economists say,         ones affected in any economic crisis; the most

10     accountants today | august 2009
                                                                                    RECESSION 101

marginalised often see their marginalisation           as it means employment.
worsen in parallel with the country’s economy.             On another level, financial institutions will
These marginalised groups include women, chil-         have to relook their lending policies. Right now,
dren, the disabled, single-parent households, and      there is a tendency to lend to those who do not
the unemployed, who will find their already pre-       need it, whereas the neediest are deemed credit
carious situations becoming even more of a slip-       risks, and are forced to borrow from unregulat-
pery slope as the recession deepens.                   ed or illegal sources.
    Poor people are affected more than others              What governments should be doing is recast-
because they have fewer buffers. They are usu-         ing national development strategies to include
ally unskilled labour and are primarily employed       comprehensive investment, employment and
in the informal sector, thus they cannot switch        social security policies that can protect people
jobs and are more exposed to unregulated labour        from the vagaries of a world economy rife with
markets.                                               capricious financial systems.
    The poor will remain poor even after the re-
cession is over because the measures they are                beyond the recession
forced to take during the downturn, like reduc-
ing spending on food, cutting back on healthcare       Right now, the recession is the focus of every-
and even withdrawing children from school, will        one’s attention. But there will be Life after Re-
eventually lower their future income-earning po-       cession, although we may emerge bruised and
tential. Thus the vicious cycle of poverty is per-     battered. Market watchers cautiously predict a
petuated.                                              bottoming out as early as December 2009. Bot-
                                                       toming out, however, does not mean improve-
 opportunities in a recession                          ments in the current economic situation. Re-
                                                       alistically, we can expect current conditions to
As unlikely as it may seem, there are opportuni-       persist until 2011.
ties to be had amid the doom and gloom. While              We need to recognise that recession not-
governments have declared stimulus packages in         withstanding, we have reached an economic
the billions and trillions, companies can do their     and political crossroad, and the direction we
bit as well. Cutting back on operational expendi-      take vis-à-vis national policy and strategy is
ture is a given; possibilities of bonuses in 2009      crucial to our survival in the global economy.
range from slim to highly unlikely, but now is the     There are several areas which need attention;
time for companies to take stock of their position,    the development of local talent in high technol-
and determine their strategy for the next decade.      ogy and managing a glut of unskilled labour are
    This, a period of commercial slowdown, is the      just two.
ideal time to strategise and put a business suc-           As painful as it may be, a recession teaches
cession plan in place. It is a good time to identify   many important things, but perhaps our most
the talent your company has, what it needs, and        important takeaway from this turbulent time will
how to make up the shortfall. Consequently, it is      be that the financial systems we put in place are
a good time to hire talent, which may not be so        not an end in themselves, but are intended to
discerning of what job you are offering, as long       benefit the greater public good. n

                                                                  august 2009 | accountants today    11
economy | COVER STORY

     Top tips for
                                                   your business

     Do a financial health
     check of your business                                  TIP#2
      In an economic downturn, you should regularly        improve your cash flow
     analyse the financial position of your business,
     because its financial position will determine         Typically in an economic downturn, the most
     whether the business remains viable and               significant problem faced by many businesses
     whether it is positioned for future growth.           is poor cash flow. Ideas to improve your cash
          You can get a lot of information on the          flow include the following:
     financial health of your business (and hence          •	 convert	your	outstanding	debt	into	cash	
     about how your business is performing) by             •	 prepare	regular	cash	flow	forecasts	
     analysing your financial statements through           •	 skew	promotions	to	products	and	services	
     financial ratios such as liquidity ratios, solvency       that can be turned into cash quickly
     ratios, profitability ratios, management ratios       •	 measure	and	reward	the	behaviour	of	your	
     and return on investment ratios.                          staff that improves cash flow
          Less formal indicators such as the value of      •	 make	full	use	of	your	terms	of	trade	
     daily sales, the value of next week’s pre-orders      •	 don’t	 let	 personal	 drawings	 from	 the	
     or the turnover of a key item of stock (such as           business get out of hand
     the quantity of coffee beans a café goes through      •	 reduce	stock	levels	
     in a week) can also be indicative of how the          •	 replace	 slow-moving	 and	 obsolete	 stock	
     business is performing.                                   with stock that has a faster turnover
          You will get an indication of the financial      •	 sell	unnecessary	assets	
     health of the business when you compare               •	 seek	finance	from	external	sources
     these current ratios and indicators with past
     ratios and indicators and with those of similar
     businesses in the same industry.

12   accountants today | august 2009

                improve or return
                your business to

                A profitable business is generally a
                successful business. Therefore it is
                important that while you improve the
                cash position of the business, you also
                aim to be profitable. Ideas to improve or
                return your business to profitability
                include the following:
                •	 prepare	regular	financial	statements	
                •	 focus	 on	 sales	 that	 give	 you	 the	
                    highest margin
                •	 don’t	discount	on	low	margin	products	
                    and services
                •	 don’t	discount	unless	you	can	achieve	
                    the same or better gross profit
                    through increased sales volume
                •	 control	costs	
                •	 be	 flexible	 with	 your	 staffing	
                •	 don’t	chase	any	sale;	chase	profitable	

                improve your
                access to finance

                All businesses need finance to establish
                and grow. Finance can be provided from
                debt, equity and internal sources. Ideas
                for improving your chances of accessing
                finance include the following:
                •	 disclose	 all	 necessary	 information	
                    required by the bank
                •	 start	 to	 seek	 finance	 as	 soon	 as	
                    possible and shop around
                •	 be	 sensible	 about	 the	 amount	 you	
                    actually need to borrow and be able to
                    justify it
                •	 take	 your	 time	 preparing	 the	
                    application as a well prepared
                    business proposition is a good sign
                    of a borrower’s commitment to a
                    prospective lender
                •	 if	you	fail	in	your	loan	application,	find	
                    out why

                     august 2009 | accountants today       13

                                                 conduct research to find out how your
                                                 customers and competitors are responding
                                                 to the current economic environment

Do a swot analysis

In a downturn, you should adopt a risk                                                             TIP#9
management mindset and take stock of               TIP#7                                         take aDvantage of
your business more broadly. You should
                                                 aDopt appropriate                               opportunities
•	 conduct	research	to	find	out	how	your	        risk management
    customers and competitors are                strategies                                      Businesses that find themselves in a
                                                                                                 strong financial position should consider
    responding to the current economic
                                                                                                 opportunities to expand, for example, by
    environment                                  Downturns may expose risks to the
                                                                                                 acquiring competitors. The opportunities
•	 not	 starve	 your	 business	 of	 essential	   business (from internal and external
                                                                                                 may be more favourable now because
    investment                                   sources) which were not previously
                                                                                                 asset prices may be lower than usual and
•	 review	 your	 business	 operations	 and	      apparent and which may threaten its
                                                                                                 there may be less competition for them.
    look for improvements                        viability. Such risks include the following:
                                                 •	 relying	too	heavily	on	a	small	number	

                                                     of major customers
                                                 •	 relying	too	heavily	on	one	supplier	
                                                 •	 selling	on	credit	                           consiDer exiting
make a                                           •	 reduction	 in	 demand	 for	 your	 goods	     your business
marketing plan                                       and services
                                                 •	 fraud	                                       Most businesses will trade through the
With less money being available, it is
                                                                                                 tough times, some with greater success
important that your marketing plan helps
                                                                                                 than others. However, some businesses
you to achieve key objectives to get you           TIP#8                                         affected by a downturn will not survive.
through the downturn, particularly
improving your cash position and                 other commercial                                There are several ways that a business

profitability. Ideas for a marketing plan in     consiDerations                                  can be wound up. Refer to Companies
                                                                                                 Commission of Malaysia (CCM) for
a downturn include the following:
                                                                                                 advise on this or visit their website at
•	 focus	 on	 chasing	 sales	 that	 have	 a	     Other commercial issues to consider in a
    high margin and bring in the cash            downturn include:
                                                                                                      For information on the consequences
    quickly                                      •	 your	 terms	 of	 trade	 and	 other	
                                                                                                 of insolvent trading, visit the SSM website
•	 reward	staff	for	sales	of	higher	margin	         contractual issues imposed on
                                                                                                 or your accountant or lawyer could explain
    products and when payment is                    customers
                                                                                                 the risks to you.
    received                                     •	 your	 interests	 as	 a	 tenant	 if	 the	
•	 don’t	discount	unless	it	can	lead	to	a	          landlord defaults
    better gross profit through increased        •	 breaches	 of	 debt	 covenants,	 value	 of	   conclusion
    sales volumes                                   security and personal guarantees
•	 measure	 the	 success	 of	 each	                 provided to secure finance                   Businesses that are well run use these
    promotional activity or campaign             •	 whether	 the	 asset	 protection	 steps	      ideas during both the good times and the
•	 focus	 on	 encouraging	 customers	 to	           taken by the business owner/director         bad in order to maximise their profits and
    pay at the point of purchase or to pay          are effective                                minimise risk. Using them now can help
    early                                        •	 reducing	 the	 size	 of	 your	 workforce,	   your business to emerge in a much
•	 use	 in-store	 signs	 to	 highlight	 a	          or alternatives such as reducing             improved condition, which will likely lead
    special or high margin product                  hours                                        to long-term growth. n

14    accountants today | august 2009

         august 2009 | accountants today   15

                         Counting the

     We typically think of expatriates as living   15 per cent of those in Saudi Arabia are       employers. Saudi Arabia introduced
     the good life. But recession means that       cutting back on visits to the doctor and       compulsory insurance in 2007, but
     most expats - especially those in the lower   scrimping on prescriptions. ArabianBusiness. notes that the lowest-
     to middle-income brackets - have had to       com reported that recession-hit UAE expats     priced plans offer very limited cover. Over in
     trim their living costs. One means of         were twice as likely to cut back on doctor’s   the UAE, mandatory health insurance is only
     budgeting is to bypass doctors and use        appointments compared to the global            available in Abu Dhabi whereas health
     the internet to self-diagnose health          average, while nearly 26 per cent substitute   insurance and medical benefits are up to
     problems and save on expensive                prescription drugs with home remedies to       the discretion of the employer.
     healthcare costs.                             keep a lid on health spending.                     Sadly, in the long run, sacrificing on
         A recent survey by Datamonitor on             The situation is not helped by poor        healthcare spending will surely compromise
     Recession and Recovery found that more        medical insurance coverage and limited or      the health of this vulnerable group.
     than 18 per cent of expats in the UAE and     non-existent medical benefits from

16    accountants today | august 2009
                                                                                                     COUNTING THE HUMAN COST

Food and shelter are basic needs, but
many are losing their homes along with
their jobs, as a loss of income often means
that people can’t pay off mortgages to
fend off bank foreclosures on their
     Life can imitate art, and in an echo of
the film “The Terminal”, where a stateless
Tom Hanks lives in airport-land, some
homeless sleep, bathe and eat in airports
with excellent public amenities. The busier
the airport, the easier it is to blend in.      Singapore’s Changi airport too, one of the       Sacramento’s tent city with over 150
“Rough sleepers,” as homeless people are        region’s busiest, apparently serves as a         residents in February this year, stressing how
known in Britain, disguise themselves at        temporary home for several “high-class           numbers in the decade-old settlement
all major airports, Sandie Cox of social care   homeless”, who are indistinguishable from        expanded as the downturn worsened. It
organisation Heathrow Travel Care told          airline passengers in their business suits and   isn’t solely an American problem. Over the
the Times in 2008. The problem is not           dragging branded luggage, relates a              New Year, laid-off workers turned Tokyo’s
unique to Britain, since Chicago’s O’Hare       Singapore social worker.                         Hibiya Park into a temporary tent city, before
airport instituted a homeless outreach               Other homeless camp out. Oprah              the government moved them into shelters
programme in the 1990s, noted the Times.        Winfrey highlighted the story of                 on 5 January this year.

                                                                                                      august 2009 | accountants today       17

              salvation                                Nazatul Izma


       an saving the planet            He’s not alone. Britain targets one million    investments will be made in projects
                                       green jobs for the UK by the middle of the     aimed at recycling waste, increasing
       save the American               next decade by leveraging its lead in the      energy efficiency, forest conservation and
       economy? uS                     US$4.4 trillion or € 3.3 trillion global       developing renewable energy resources.
President Barack Obama                 market in green goods and services.            Likewise, Japan too has unveiled plans to
thinks so. His uS$775 billion               Not to be left out of the loop, Asian     expand its US$745 billion green business
                                       industrial powers too announced ambitious      sector to US$1 trillion by 2020 thus creating
American Recovery and                  plans to tackle rising carbon emissions        about 800,000 new jobs, and offsetting
Reinvestment Plan includes             while creating jobs and stimulating            plunging exports. China too has jumped
spending uS$150 billion                economic growth. South Korea plans to          on the bandwagon, announcing that US$30
over ten years on energy               invest 50 trillion won or US$38 billion        billion of its US$586 billion stimulus would
                                       in the next four years on environmental        go to green projects, such as boosting
and environment measures.              initiatives to create almost a million new     investments in renewable energy. China
These include doubling                 jobs, which will take up the slack as global   has also announced plans to double the
alternative energy supplies            demand wanes for its traditional products      nation’s 2007 output of alternative energy
in three years, overhauling            such as automobiles and tech. The new          by 2020, which apparently has made
75 per cent of federal
government buildings and
two million private homes
for greater energy efficiency,                                                New investments will be made in
and building a new “smart”                                                    projects aimed at recycling waste,
electricity grid, all of which                                                increasing energy efficiency, forest
will also create about half-a-                                                conservation and developing
million value-added green-                                                    renewable energy resources.
collar jobs.

18   accountants today | august 2009
                                                                                                                 GREEN SALVATION

                                                                                              already been announced by 34 nations.
                                                                                              This stimulus, along with new initiatives
                                                                                              by other countries, must help catapult the
                                                                                              world economy into the 21st century, not
                                                                                              perpetuate the dying industries and bad
                                                                                              habits of yesteryear. Indeed, continuing to
                                                                                              pour trillions of dollars into carbon-based
                                                                                              infrastructure and fossil-fuel subsidies
                                                                                              would be like investing in subprime real
                                                                                              estate all over again.”
                                                                                                  Naturally, the extent to which an
                                                                                              economy adopts green policies depends
                                                                                              on its particular circumstances. What
                                                                                              might fit a mature economy differs from
                                                                                              the decarbonisation strategy suitable for
                                                                                              economies in transition, such as Malaysia.
                                                                                              Bearing in mind that one size does not fit
                                                                                              all, the United Nations Environment
                                                                                              Programme (UNEP) nevertheless makes
                                                                                              some broad recommendations for
                                                                                              investment and change that could kickstart
                                                                                              green growth and job creation, stressing
                                                                                              that these are in no way a prescription.
                                                                                                  The United Nations is in the vanguard
                                                                                              of the green revolution, launching both
                                                                                              Global Green New Deal and Green
                                                                                              Economy Initiative campaigns in late 2008.

its renewable energy sector a lure for           weekly, Monday Morning, early this year.
international investors.                             The flaw in orthodox thinking is that
     Ironically, the EU which is traditionally   it sanctions the wasteful, consumption-
a bastion of green thinking, has been            oriented mentality of previous years,             Indeed, continuing to
castigated for discounting sustainability        instead of creating a new model.                  pour trillions of dollars
measures as a means to recharge                  Proponents of green thinking such as              into carbon-based
economies. The largest 13 EU economies           UN Secretary-General Ban Ki-Moon and
announced stimulus packages worth €90            ex-US vice-president and eco-evangelist
                                                                                                   infrastructure and fossil-
billion or 0.78 per cent of their gross          Al Gore argued earlier this year in the           fuel subsidies would
national product in total. But of this only an   Times: “Stimulus is intended to jump-start        be like investing in
estimated €1.2 billion or 1.3 per cent will be   the economy, but if properly conceived            subprime real estate all
allocated for green investments, according       and executed it can also launch us on a
to figures from the Brussels based think-        new, low-carbon path to green growth.
                                                                                                   over again.
tank Bruegel reported in the Danish              Some US$2,250 billion of stimulus has

                                                                                                   august 2009 | accountants today    19

In its Global Green New Deal policy brief,      These would include improving                  other leading Asian economies - such as
one of UNEP’s “low-hanging fruits” is for       environmental legislation, reducing or         jugger naut-in-the-making            China,
governments to invest in retrofitting public    eliminating “per verse subsidies”,             innovative Japan and trendy South Korea -
buildings to be energy efficient and to         promoting greater use of renewable verses      are embracing decarbonisation with
provide incentives for greening and             fossil-fuels as well as encouraging public     gusto. Elsewhere, Malaysia champions
weatherising homes and offices. Greening        transpor t versus private cars. In             convergence with global trends and
building stock carries the highest potential    particular, embedded “perverse subsidies”      best practices, whether through recent
for improved efficiency because buildings       such as fuel subsidies and agricultural        liberalisation of financial and capital
are responsible for 30-40 per cent of all       subsidies could jeopardise investments in      markets and adoption of international
energy use, greenhouse gases and waster         sectors such as energy-efficient public        financial reporting and auditing standards,
generation.                                     transport and organic farming.                 partly in a bid to appeal to investors and
     More of the stimulus packages could            To facilitate reforms, UNEP also           shore up flagging FDIs and portfolio
also be used to develop sustainable             encourages governments to look into            investment. Lagging behind on global
transport, whether public or private.           an incentive system of subsidies,              green best practices short-circuits
UNEP points out that promoting efficient        taxes and regulations that encourage           competitiveness, especially if sustainability
green cars using technologies available         environmentally responsible behaviour          measures are increasingly being used as
today could save six billion barrels of oil
or two gigatonnes of CO2 emissions per
year, equivalent to half of all EU emissions
currently. The increased production of low
emission vehicles could create more than                                                      Acting early would also give
3.8 million jobs globally, and save jobs in                                                   us a more resonant voice on
the sunset auto industry. Notably, Germany                                                    the global green stage, just
has earmarked a US$67 billion subsidy for
                                                                                              like we’ve done in the field of
its car industry linked to the development
of world-leading green vehicles with the                                                      Islamic finance.
lowest greenhouse emissions. One in
seven Germans are employed directly or
indirectly in the struggling export-oriented
automotive sector.
     Investment in clean and efficient public   and penalises polluters. The crisis            screens for international business and
transport systems could also pump up            provides a window for tax reform, such         investment.
jobs. For instance, a 10-year US federal        that the tax burden is shifted away from           Piecemeal efforts by the environmental
investment programme in new high-speed          economic “goods” such as jobs, income          ministry, capital markets regulators and
rail systems could create a quarter million     and fuel-efficient vehicles towards            the private sector to drive sustainability
jobs, while South Korea’s US$7 billion          economic “bads” such as carbon, pollution      can only go so far without concerted
investment in mass transit and railways         and dirty, inefficient vehicles.               government support. The government
over the next three years could create              Despite the global green shift,            needs to throw its weight behind a
138,000 jobs, notes UNEP.                       Malaysia’s first and second stimulus           consistent and integrated green framework
     Sustainable energy is also a crucial       packages contained few surprises, even         that wields policy, incentives and penalties
sector for green economy plans, whether         though then-Deputy Prime Minister              to achieve the desired results.
it’s through financing clean energy             Datuk Seri Najib Tun Razak said when               If we refuse to be in tune with trends
projects, investing in smart grids or           unveiling the second stimulus package of       towards decarbonisation and conserva-
expanding investment in renewable               RM60 billion in March that Malaysia            tion, we might be left out of the global
energy infrastructure. Likewise, investing      cannot depend on orthodox recovery             business loop and be sidelined by inves-
in sustainable agriculture and freshwater       policies. Amidst the pork, there is scant      tors. Acting early would also give us a
systems could uplift quality of life, since     green, unless incentives for trading in old    more resonant voice on the global green
agriculture is the single largest sector in     used cars for a new Proton or Perodua          stage, just like we’ve done in the field of
the world in terms of employment with           count towards cutting carbon emissions,        Islamic finance. By not weaning ourselves
over a billion workers.                         instead of propping up the domestic auto       off our fossil-fuel habit and our addiction
     UNEP also singles out the need for         industry.                                      to “perverse subsidies”, Malaysia might
domestic policy interventions to establish          Nevertheless, it seems myopic to           become fossilised even as other nations
a level playing field for green investments.    downplay sovereign green policy when           forge ahead, fueled by green power. n

20   accountants today | august 2009

         august 2009 | accountants today   21

2010 wishlist
More tax here…
ll the goods & services tax (gst)
is a consumption tax, paid by the

consumer only at the end of the supply
chain. Because GST is levied only on
     consumption, it encourages people
      to save, not spend. At the global
       level, GST can make Malaysia             ll there are few bones so                have something worth attending, so
        more competitive as instituting it      contentious in this country as           let’s have more funding to keep kids
         indicates that Malaysia is capable     education, or the lack of it. Would it   in schools with proper facilities like
          of absorbing more taxes, which        hurt to spend more on education?         running water, electricity and toilets
           is a positive factor from the        Surely people don’t mind trading         that work, please.
            foreign trade perspective. And      heavy artillery or submarines for more        If National Service is scrapped,
             while we’re on the subject         books that will help their children      its allocations can be put towards
              of more taxes, up the sin         understand the world, computers                             nutritional school
               taxes!                           that will help them learn, and school                       meals, computers
                                                nutrition programmes that will keep                         and libraries to help
                                                them healthy. Aren’t books cheaper                          our children learn –
                                                than weapons?                                               and more funds for
                                                     We are so often urged                                  teachers. There’s
                                                to find creative solutions,                                 nothing like an
less tax there…                                 to “think out of the                                    infusion of cash to attract
ll please reduce corporate and                  box.” What about paying                                 better, brighter teaching
individual taxes! It’s happened in recent       people to make sure                                     candidates. Arrange for
years but it will be nice to pay even less.     their kids go to school?                                retired English teachers
Can companies which can demonstrate             And while we’re at it, we                               to give after-hours
that they haven’t cut back in employee          should make sure they                                   tuition.
benefits despite the recession, be given
a little more incentive – like spreading
out corporate tax payments for 2009 over
three years? The government may also
want to ease up on processes like the
forecast tax currently in effect.
                                              help for faMilies                          comprehensively for senior citizens and
                                                                                         the disabled, will be required. To keep
     For individuals, personal relief         ll it would be really great if some        minds nimble, professional organisations
should be increased from RM8,000 to           sort of incentive scheme could be          could offer continuing education for
at least RM12,000 – and for the wife          put in place that will allow working       senior citizens or the disabled online,
and kids too. Separate out relief for life    adults to stay at home to care for         and if a certain number of users sign
insurance premiums and approved fund          their aged parents. As the Malaysian       up, these organisations could get a tax
contributions, instead of capping it at       population ages, this sort of structure,   exemption.
RM6,000 for all.                              together with services that cater more

22   accountants today | august 2009
                                                                                               BUDGET 2010 WISHLIST

  Public                                                   Environment
ll What can be said about
improving public transport
                                       ll stringent enforcement and
                                       more thorough vetting required
                                       here,     please.     Environmental
                                       protection in Malaysia could do with
                                       a lot more clout. Only truly legitimate
                                                                                  with. Does anybody remember what
                                                                                  happened to the move to turn the
                                                                                  unutilised roofs of urban office blocks
                                                                                  into vegetable gardens? Now there’s
                                                                                  a real out-of-the-box solution! Can
                                       environmental causes should be             you imagine how much your office
that hasn’t already been said?
                                       tax-exempt, and this status should         canteen operator would save if your
That fact alone is indicative of
                                       be vetted regularly to see if the          office rooftop supplied his choy sum?
how much of a shortfall exists in
                                       guidelines are still being complied        Your chap fan would cost less!
this sector.
     Make no mistake about
it, the LRT is a success. With
the plans for service extension
in the Klang Valley, it will        developing                                    What We can
require longer trains and better    local talent                                  do When the oil
maintenance. Can we include
                                    ll Much has been said about
                                                                                  is gone
disabled-friendly buses as
                                    moving up the value chain but “how to”        ll our oil reserves will run out in
well – the type with a proper
                                    instructions are still a bit hazy. Since we   15 years. Malaysia will become a net
wheelchair ramp, or sturdy fold-
                                    already have the infrastructure in place,     importer rather than exporter of oil and
out step to help not-so-nimble
                                    perhaps there should be a concerted           gas. How will we make up for this loss of
senior citizens?
                                    move to develop local tech talent to beef     revenue? Reduce expenditure on mega
     At the risk of sounding like
                                    up high-value commercial activity, and        projects, and invest more in R&D on
a faulty CD, we need to relook
                                    to spur professional development. The         alternative renewable energy sources,
the special charges for entering
                                    authorities should be aware by now that       like solar power. This can be part of the
Central Business Districts
                                    a lot of our accounting talent is being       thrust for higher value-added activities
a la Singapore. It won’t stop
                                    poached too.                                  that are being touted by all quarters.
people from buying cars, but at
least they’ll think twice about
contributing to city congestion.    Where Will the                                the basics never
Don’t just talk about flexible      Money coMe froM?                              looked so good
working hours or working from
home – do it.                       ll institute gst; up sin taxes; forget        ll it may be a good idea for the
                                    about mega projects and overseas “study       country to go back to basics. Promote
                                    tours” and start basing increments and        agricultural and local manufacturing
                                    bonuses for the civil service – especially    industries to create jobs and increase self-
                                    the most senior civil servants – on public    sufficiency. The Budget 2010 Wishlist
                                    evaluation. The government may want           is signalling that Malaysians are
                                    to consider a gentler range of tax rates,     willing to make sacrifices now, for
                                    from, say 12% to 15% instead of the current   the benefit of future generations.
                                    12% to 19%.                                   Generally, they want better
                                                                                  infrastr ucture – road,
                                                                                  rails, amenities – and
                                                                                  better security. Hasn’t
                                                                                  anybody      noticed
                                                                                  the spiraling crime

                                                                                       august 2009 | accountants today      23

24   accountants today | august 2009
                                    credibility       Majella Gomes


                   hen I first took up       presidents. He draws a culinary anal-        extending educational
                   the position in 2007,     ogy to describe his efforts: “Since 2000,       and professional
                   I asked myself what       the presidents have been renovating the           boundaries
                   I wanted to deliver. I    kitchen, and going to market. Right now,
                                                                                         With the firm belief that appropriate edu-
analysed the role of MIA, including read-    I’m doing the cooking!”
                                                                                         cation is the responsibility of the pro-
ing the Hansard on the Accountants Act,          He is justifiably proud of having
                                                                                         fession, the organisation’s offerings in
to make sure I understood the backdrop       beefed up certain MIA systems, most
                                                                                         the Education & Development depart-
against which the organisation was found-    notably in enforcement and surveillance,
                                                                                         ment have become more comprehen-
ed,” he explained.
                                                                                                        sive. Numerous workshops
                                                                                                        and training sessions for
    a question of
                                                                                                        continued professional
What he realised from this
                                     A single assessment process is therefore                           development are available,
                                                                                                        and members are encour-
extensive organisational back-       required to benchmark an accountant’s                              aged to attend as many as
ground check was that he                                                                                possible to keep updated
wanted the profession to be         capabilities, and encourage professionals                           on professional as well as
respected for its credibility,
through having members with
                                      to demonstrate their competence and                               industrial matters.
                                                                                                            In a rapidly globalising
the right skills and professional      qualification. People will have more                             world, our yardstick has to
values. “Intrinsically, MIA is                                                                          be the international stand-
about ensuring and enhancing          opportunity to prove themselves and                               ards that are subscribed
the accountability of the profes-
sion,” he emphasised.
                                             reaffirm their credibility.                                to by all accounting bodies
                                                                                                        worldwide. A single assess-
    During his tenure, the organ-                                                                       ment process is therefore
isation has intensified its focus on three   besides having improved the organisa-       required to benchmark an accountant’s
main areas: Education & Development,         tion’s knowledge base to empower it to      capabilities, and encourage profession-
Standard-setting and Enforcement. But        respond to challenges more effectively.     als to demonstrate their competence
Nik Hasyudeen is quick to point out          “We are pretty well set up now, with a      and qualification. People will have more
that he had the advantage of building on     dynamic CEO supported by a capable          opportunity to prove themselves and reaf-
foundations already laid out by previous     management team,” he says.                  firm their credibility.

                                                                                              august 2009 | accountants today    25

    Keeping abreast of developments also        website is seen as a given in most cases,          “Their knowledge and training
includes being aware of the larger picture      but the MIA guarantees a response, and         put them in an ideal position as advi-
that involves matters like convergence,         to members who may not have immediate          sors to management,” he emphasises.
the growing momentum for more trans-            access to the information they require,        “Accountants have their eye constantly
parency and better corporate governance,        this could prove a godsend. In addition,       on cash flow and operational expenditure
and amendments to the laws that directly        there have been queries which have war-        – the basics of business. It is not difficult
or indirectly affect the profession, like the   ranted more than just passing attention        for them to actually bring companies to
amendments to the Accountants Act.              because they have given direct insight         more efficient and competitive operating
                                                into what is happening in the industry,        levels, which is a higher-end manage-
     constitutional clout                       practically in real time.                      ment function.”
                                                                                                                He adds that this is partic-
Explaining that one of the
                                                                                                           ularly significant, considering
main issues in Malaysia is
                                                                                                           that almost 99% of Malaysia’s
the competency of account-
                                                                                                           economy is composed of
ants, he said that the amend-
                                                                                                           SMEs which are not utilising
ments were intended to make            Nik is of the opinion that the future is                            their accountants’ services at
the Act more robust so that
any infringement can be dealt         about managing chaos and change, and                                 optimum levels. It will bring
                                                                                                           the Malaysian economy to
with accordingly. However,
enforcement is the last
                                      accountants have to be ready to take on                              another level if these SMEs
                                                                                                           begin operating more effec-
resort; what is at issue is the         the challenges that come with these.                               tively, or develop the capabil-
performance of members in
                                                                                                           ity to expand their operations
actively upholding the ethics
                                                                                                           and compete abroad.
of the profession.
                                                    All this is part of MIA’s move to
    “It is not intended to punish, but
                                                upgrade and keep on improving the serv-                  reality check
accountants need to be aware that as
                                                ices that accounting professionals need
professionals, they owe a duty of care to                                                      But before all this happens, the profession
                                                as they grow and move up in their pro-
their clients, who depend on their compe-                                                      needs to be prepared, he cautions. “A lot of
                                                fession because, Nik says, “We have a
tency, professionalism and integrity,” he                                                      accountants’ skills can be “sold” to clients,
                                                responsibility to our profession, in that we
says. “In the same way, we depend on the                                                       but it must be done without compromising
                                                need to be constantly aware of business
competency and knowledge of a doctor to                                                        professional values. The survey that MIA
                                                and societal dynamics. It’s imperative that
whom we go for medical treatment.”                                                             conducted to determine the service needs
                                                we understand what is changing, and how
                                                                                               and usage patterns of SMEs show there
                                                we should respond.”
        internal and                                                                           is a concern about trust! This indicates
      external revaMps                                                                         a generally negative public perception of
                                                      changing role of
                                                                                               accountants’ integrity, which we can only
The MIA Council is now more focused                     accountants
                                                                                               change through being constantly transpar-
on the strategic needs of the profession.
                                                Nik is of the opinion that the future is       ent and professional.
In the past two years, it has been instru-
                                                about managing chaos and change, and               “We need to have the courage to
mental in articulating MIA’s strategies
                                                accountants have to be ready to take on        identify our shortfalls and rectify them. If
for advancement and better delivery of
                                                the challenges that come with these.           we have to upgrade our skills, we have to
services to its members.
                                                While the basics of the profession will not    be able to access the knowledge that will
    A revamped website is now operation-
                                                change, desired skills and mindsets will       enable us to do this. We have to develop
al, and includes a feedback component
                                                have to evolve, out of necessity.              the ability to use our inherent talents for
that allows members to communicate
                                                    The economic model which is becom-         the benefit of society, and uphold profes-
directly with the organisation. He is par-
                                                ing more evident in the new millennium         sional standards for the young profession-
ticularly pleased with this because, he
                                                is one based on services. If accountants       als that will come after us.
says, “It’s only been up for about a month,
                                                want to remain relevant, they will have to         “The nuts and bolts of accounting can
and we’ve already had over 500 queries
                                                start diversifying their services. Auditing    be learned in any course, but basic profes-
– a very positive indicator. Now that we
                                                will always be a pillar of the profession      sional values need to be inculcated over
have opened this particular communica-
                                                but there is no reason why accountants         the long term; these are absorbed not
tion channel, we will be able to offer even
                                                cannot move beyond this basic activity         through lectures but by observing how
better support to our members.”
                                                to higher-end, value-added services like       the right things are done, and believing
    Having a feedback component in one’s
                                                financial consultancy.                         that the right thing must be done.” n

26    accountants today | august 2009

         august 2009 | accountants today   27

                 AQuR eases
              ISQC1 Compliance
                                                  Nazatul Izma


         embers of the                 This is crucial in order for MIA to be in a       Nevertheless, compliance with ISQC1
                                       better position to assess whether to          will underpin the future viability of audit
         Malaysian                     support members’ application for the          practices. Benchmarking to global
                                       renewal of audit licences from the            standards stands firms in good stead
         Institute of                  Ministry of Finance.                          given that audit expectations are rising as
Accountants (MIA)                          With the introduction of ISQC 1 in        investors, regulators and stakeholders
                                       Malaysia in July 2006, local audit firms      demand greater corporate credibility in
renewing their audit                   have been mandated to adopt this              the wake of accounting and financial
licences must comply                   international standard to ensure that their   scandals. Speaking at a recent seminar on
                                       operations are strengthened and can be        raising audit quality, Datuk Seri Azmi
with the International                 benchmarked against the international         Khalid, Chairman of the Parliamentary
Standards on Quality                   requirements.
                                           In reality, few firms
                                                                                     Public Accounts Committee, noted that
                                                                                                     more stringent audit
Control (ISQC) 1, a set                actually abide by ISQC                                        regulations are expected

of standards on quality                1 although the standards        With the ISQC in              when the Audit Oversight
                                       have been in force for                                        Board (AOB) announced
control that is specific               more than three years.            place, there                in the 2008 Budget is

to the audit profession,
                                       A p p a r e n t l y, many        appears to be                finally established to
                                       practitioners are still                                       monitor and enhance
said MIA President Nik                 not aware of ISQC 1             upward pressure               audit quality among PLCs.
                                       requirements, whereas            on audit fees.                    If smaller firms are
Mohd. Hasyudeen                        those who ar e awar e                                         still reluctant to invest in
                                       may not know how to go                                        advancing audit quality,
yusoff.                                about implementing the                                        other options are to
                                       requirements.                                 combine with other practitioners in order
                                           Cost is a major constraint for smaller    to build up their size and resources.
                                       and medium-sized firms when it comes          Otherwise, they may have to embark on
                                       to benchmarking to global standards.          other services such as consulting and
                                       “Many feel that ISQC 1, which focuses         financial planning to diversify revenue
                                       on creating controls within the firm to       bases if non-compliance with ISQC 1
                                       strengthen its leadership, involves too       compromises the renewal of their audit
                                       much investment. This places a huge           licenses in future.
                                       burden, especially on firms that are run          On a positive note, compliance with
                                       by one partner alone,” said Nik.              ISQC 1 could provide superior returns on

28   accountants today | august 2009
                                                                                                AQuR EASES ISQC1 COMPLIANCE

                                                                                                 isqc 1 in brief
investment over the long term. The             to facilitate the audit firm’s quality control    ISQC 1 prescribes the quality
subsequent enhancement in audit quality        for accreditation and/or improvement              elements within a practice, starting
can give firms an edge in a competitive        planning efforts. It allows navigation            with the strategic leadership within
marketplace and result in increased fees.      through the ISQC 1 requirements and the           the firm with emphasis on quality all
“With the ISQC in place, there appears to      system provides results interactively.            the way down to how decisions
be upward pressure on audit fees,”                 As an incentive for member firms to           should be properly documented. The
commented Nik. There is ample room for         use AQuR and abide by ISQC 1, excellent           elements within the model include:
rates to rise since recent studies revealed    AQuR scores could be instrumental in the
that Malaysia’s audit fees are still the       audit licence renewal process. With effect        nn Commitment to high ethical
lowest in the ASEAN region.                    from 1 May 2009, an amended Form                     conduct;
                                               M1(A) must be completed by auditors               nn Procedures that deal with the
                                               renewing their audit licences. “A                    client’s due diligence;
    self-assessing auDit                       conscious effort in obtaining a good score        nn Firms’ HR practices and the
     Quality with aQur                         under the AQuR System should validate                emphasis on continuous
To help audit practitioners gain familiarity   the declarations to be given to the Jabatan          learning;
with and prepare themselves for                Akauntan Negara Malaysia in relation to           nn The need to carry out the
compliance with ISQC 1 requirements,           the firm’s compliance with ISQC 1,”                  assurance engagement based on
firms are encouraged to use the Audit          declared a statement issued by MAREF.                the approved auditing standards;
Quality Rating (AQuR) portal to diagnose       “The AQuR System will assist member                  and
the current state of their audit quality       firms of MIA to do a reality check on their       nn Creation of quality review circles
mechanisms. The AQuR por tal was               operations way before the audit licence              within the practices.
developed by a group of researchers from       renewal process is due.”
Universiti Teknologi MARA (UiTM) in                The use of AQuR could also help keep          The ISQC 1 standards were set by the
collaboration with the Malaysian               audit firms up-to-date with ever-changing         International Auditing and Assurance
Accountancy Research and Education             expectations. “Members must be dynamic            Standards Board (IAASB), the
Foundation (MAREF).                            in responding to new requirements which           standard-setting arm of the
    Accessible at        have been put in place to further enhance         International Federation of
my/isqc/, the AQuR System is an online         audit quality and the AQuR System helps           Accountants (IFAC).
self-assessment tool based on the ISQC 1       them to do this,” noted Nik. n

                                                                                                  august 2009 | accountants today   29
accounting | worlD news
UK: Accounting standards                 administration and congressional          Ceremony, jointly organised by the      corporate sector has to improve
‘should not be used to promote           Democrats, who are targeting com-         Institute of Cost and Management        the corporate governance even in
prudence’                                panies with substantial US opera-         Accountants of Pakistan (ICMAP)         tightly held ownership companies.
Accounting standards should              tions that are incorporated in tax        and the Institute of Chartered          Raza observed that the modern
not be changed in an attempt to          havens like Bermuda to lower their        Accountants of Pakistan (ICAP)          accounting system underpins the
introduce greater prudence in the        overall tax burden. It is believed that   Raza said: “There is still a need for   continuity and evolution of the
financial services sector, it has been   Ireland and Switzerland are likely to     fostering a change in the think-        joint stock company, which is the
claimed. Responding to the Turner        be big winners as companies shift         ing of the corporate sector as the      base of all developments in the
Review, Ernst & Young warned that        base from places such as Bermuda          old system of protectionism can-        modern economy. He said that
changing standards for this rea-         and the Cayman Islands which are          not work in this challenging global     from the simple double entry book
son would make them less suited          expected to suffer under expected         environment.” He said that these        keeping system, the profession of
for their primary tasks - guiding        US tax changes, it said. It quoted        awards would also assist the coun-      accountancy has evolved into a
the preparers and users of finan-        William D. Green, Accenture’s chair-      try’s economy, which needs size-        qualitative framework of methods
cial information, according to a         man & CEO as saying: “After a care-       able investments in fixed capital.      and standards that ensure a com-
report at The firm,         ful review, our Board of Directors        The government’s efforts towards        pany’s affairs are well understood
according to the report, had said:       has determined that changing our          structural reforms and recent           by all constituencies i.e., sharehold-
“This would also create obstacles        place of incorporation to Ireland is      geo-political developments in the       ers, employees, fiscal authorities,
to the adoption of a single set of       in the best interests of Accenture        South Asian Region have once            financial stakeholders and pro-
high-quality standards worldwide,        and our shareholders. We believe          again put Pakistan in a position        spective investors. Raza said that
a project which has global support       that incorporating in Ireland will        to attract foreign investments and      the accountancy profession has
[and was] most recently endorsed         provide Accenture with economic           these awards would serve as a cat-      immensely supported and contrib-
by the G20 at the London Summit.”        benefits and help ensure our con-         alyst in augmenting this progress,      uted towards the emergence of
Changing standards in an attempt         tinued global competitiveness. “A         he added. Raza urged professional       the modern day economic system
to boost prudence would also make        member of the European Union,             accountants to work with renewed        and its institutions. n
it harder to compare reports from        Ireland offers a sophisticated, well-     zeal to enhance the prestige of the
different jurisdictions, the state-      developed corporate, legal and            profession in the present global        CHINA: Higher Tax on Tobacco
ment added. Ernst & Young praised        regulatory environment. It also           economic slowdown, the report           Products
the Financial Services Authority         has a long history of international       added. Raza opined that the Best        China has increased taxes on
(FSA) for correctly identifying some     investment and long-established           Corporate Reports Award would           tobacco products and this is
areas where action is needed, but        commercial relationships, trade           certainly encourage greater trans-      expected to “moderately improve”
warned that there is still more to       agreements and tax treaties with          parency in disclosure of annual         financial revenue, according to the
do. Recently, John Tattersall, chair-    European Union member states, the         accounts and to strengthen good         Ministry of Finance and the State
man of the UK regulatory practice        United States and other countries         governance practices in the cor-        Administration of Taxation. China is
at PricewaterhouseCoopers, urged         around the world where Accenture          porate sector. These awards would       credited to have the largest popu-
the FSA to avoid damaging the            does business. In addition, Ireland       also narrow the credibility gap,        lation of smokers in the world. In
country’s financial services sector      offers a stable political and eco-        which exists between various            2008, China had nearly 350 mil-
when making changes to the way           nomic environment and has the             stakeholders and the manage-            lion smokers and estimates indicate
it polices institutions. n               financial and legal infrastructure        ment of the companies, he added.        about one million tobacco-related
                                         to meet Accenture’s needs, both           He hoped that the level of reli-        deaths each year, reports RTTNews.
IRELAND: Accenture moves                 today and in the future.” n               ance by all the stakeholders on         Cigarette cartons costing 70 yuan
from Bermuda to Ireland                                                            the corporate reports and annual        or more will now attract 56% tax
Global consultancy and outsourc-         PAKISTAN: Corporate sector                accounts will significantly grow in     from the 45% tax levied earlier. Tax
ing company Accenture has said it        urged to be more transparent              the years to come. He said the          on cigarette cartons costing less
intends to change its place of incor-    The Governor of the State Bank            cross border exposure of the cor-       than 70 yuan will now be 36%, up
poration to Ireland from Bermuda.        of Pakistan, Syed Salim Raza, has         porate sector, the exposure in new      from 30% charged earlier. Tax on
Accenture’s Board of Directors has       urged upon the country’s cor-             asset forms such as derivatives and     cigars have been increased to 36%
unanimously approved the change,         porate sector to introduce more           accounting for off–balance sheet        from 25% previously, the report
reports Director of Finance Online.      transparency in governance and            exposure are all accompaniments         said.
The company’s shareholders will          decision-making through greater           of globalisation and liberalisation     Tobacco products will also now
now be asked to vote in favour of        disclosure of financial and non-          and they make new demands for           attract ad-valorem tax of 5%, based
the proposed move. The report,           financial information to the stake-       progress in the area of accounting      on the real value, less inflation fac-
quoting The Wall Street Journal,         holders, reports The Daily Times.         and regulatory discipline. He said      tors. This is the first time such a
said the move comes amid a crack-        Speaking as the chief guest at the        that in order to maximise dividends     tax has been imposed on tobacco
down on tax havens by the Obama          Best Corporate Reports Award              from the global opportunity, the        products in China. n

30    accountants today | august 2009
   ifac                                                      THE IFAC UPDATE PROVIDES

                                                             SUMMARIES OF IFAC DEVELOPMENTS
                                                             OVER THE PAST MONTH.

IOSCO RECOGNISES VALUE OF ISAs                         SMP-related initiatives and the importance of      and the Professional Accountants in Business
The International Organization of Securities           IFAC undertaking additional activities. The sur-   Dynamic Links page. To register, visit www.ifac.
Commissions (IOSCO) has issued a statement             vey is one part of a review process launched in    org and click on the Login/Register link located
welcoming the completion of the Clarity Project        February to explore the issues facing SMEs and     in the left-hand navigation. n
by the International Auditing and Assurance            SMPs and the strategies by which IFAC can best
Standards Board (IAASB), as well as recognis-          support them. For more information on the work     EC CONSULTS ON ADOPTION OF ISAs
ing the important role played by International         of the SMP Committee visit:   The European Commission (EC) has launched
Standards on Auditing (ISAs) “in facilitating cross-   SMP/Committee.php n                                a public consultation to determine whether
border securities offerings and listings.” In the                                                         International Standards on Auditing (ISAs) should
statement, IOSCO also encouraged securities reg-       IPSASB REAFFIRMS IFRS CONVERGENCE                  be adopted in the European Union (EU). In its
ulators to accept audits performed and reported        STRATEGY, EMPHASISING FINANCIAL                    consultation paper, the Commission comment-
under the new clarified ISAs. The organisation         INSTRUMENTS                                        ed on the International Auditing and Assurance
noted the contributions international auditing         During its May meeting in Washington, D.C., the    Standard Board’s (IAASB) governance and due
standards make to global financial reporting           International Public Sector Accounting Standards   process, stating that “the current governance
and supporting investor confidence and deci-           Board (IPSASB) reaffirmed its commitment to        of the IAASB has matured to a stage where it
sion-making. The statement can be accessed at          its global convergence programme and the           may be justifiable to adopt ISAs in the European     development of standards dealing with finan-       Union.” A study undertaken by the University of
ments-7.pdf. n                                         cial instruments. The IPSASB stated that it will   Duisburg-Essen indicates that “an adoption of
                                                       continue its full consultation on exposure drafts  the ISAs in the EU would result in quantitative
IFAC ORGANISES G-20 ACCOUNTANCY                        (EDs): ED 37, Financial Instruments: Presentation, and qualitative benefits for companies, investors,
SUMMIT                                                 ED 38, Financial Instruments: Recognition and      and regulators, stemming from high quality and
IFAC will continue to focus on how it can best         Measurement, and ED 39, Financial Instruments:     harmonised audits.” The study can be viewed at
contribute to strengthening the global finan-          Disclosures. Meanwhile, the IPSASB said that it
cial system at a G-20 Accountancy Summit it            recognised plans of the International Accounting   index_en.htm. Interested parties are invited to
is organising in London in July. The goal of the       Standards Board (IASB) to modify aspects of its    respond by accessing the EC ISA Consultation
summit is to gather input and discuss detailed         current standards relating to the measurement      Website at
positions that can form the basis of further IFAC      of financial instruments. The IPSASB will consider consultations/2009/isa_en.htm. Comments are
submissions to the G-20 Working Groups, prior to       any changes ultimately adopted by the IASB         requested by 15 September 2009. n
their September meetings, as well as contribute        in due course. Comments on EDs 37—39 are
to the development of the institutes’ own posi-        requested by 31 July 2009. n                       PIOB’s FOURTH REPORT FOCUSES ON
tions. n                                                                                                  CONTINUED RELEVANCE OF PUBLIC
                                                       IFAC ACCEPTS ELECTRONIC SUBMISSIONS                INTEREST MISSION
REVIEW OF SMP-SUPPORT PROGRESSES                       OF ED COMMENTS; NEW ONLINE SYSTEM                  The Public Interest Oversight Board (PIOB) has
                                                       LAUNCHED                                           published its Fourth Public Report. The report
The Small and Medium Practices (SMP) Review            IFAC has developed a new system for visitors to focuses not only on the PIOB’s activities of the
Task Force, chaired by Bernadette McGrory-             electronically submit comment letters for any past year, including its oversight of the final
Farrell, is in the process of reviewing the respons-   exposure draft (ED) or consultation paper. With stages of the Clarity Project and the redrafted
es to its survey of member bodies and regional         this new process, online users will be able to IFAC Code of Ethics for Professional Accountants,
accounting organisations on how IFAC can best          register on the IFAC website, log in to submit but also on the continuing relevance of its public
support SMPs and Small and Medium-sized                comment letters, and track comments they have interest mission. The report also identifies the
Entities. Approximately 100 responses from over        submitted. The submission system is accessible importance of coordinated efforts to ensure the
80 member bodies were received. The survey,            through “My IFAC Homepage,” where registered full benefits from adoption and implementation
conducted in April, May, and June, polled mem-         users can also access the public areas of the IFAC of international standards. It can be accessed
ber bodies and regional organisations about            website, including the Global Financial Crisis and at
the awareness and usefulness of existing IFAC          Small and Medium Practices discussion boards, PIOB_2009.pdf. n

                                                                                                                 august 2009 | accountants today         31

32   accountants today | august 2009

an alternative                                 reducing the cost
business entity                                of doing business
At one end of the regulatory spectrum is       The proposed LLP structure will simplify
the Companies Act, 1965 which regulates        the filing and lodgement requirements, as
the administration of private and public       well as the administration, compared to
limited companies. At the other end of the     those of the Companies Act, 1965. Notably,
spectrum is the Registration of Business       LLP proposes to do away with statutory
Ordinance, 1956 and the Partnership Act,       audits; AGMs; simplified annual returns;
1961 (revised 1974) which regulates sole-      and the company secretary.
proprietorship and partnership.
  In between, there’s nothing.
  To plug this gap, the CCM proposed to
introduce the LLP as an additional ‘vehicle’
for the business community. LLPs provide
the best of both worlds: the protection of
limited liability and the freedom of
  Countries such as Singapore, the United
Kingdom, Jersey and others already have
their version of LLPs in place.

                                                                august 2009 | accountants today   33

key features of llps
n ComplianCE offiCEr
Every LLP is required to appoint at least
one Compliance Officer (CO) who may
be one of the partners or ‘a person who is
qualified to act as company secretary
under the Companies Act, 1965’.

The work of a CO is very much simplified
as compared to that of a Company
Secretary under the Companies Act, 1965
•	 Publication	of	the	name	of	LLP	at	the	
   Registered Office (Section 15)
•	 Registration	of	changes	in	particulars	
   of LLP (Section 27)
•	 Filing	of	Annual	Declaration	within	30	
   days of yearend (Section 28)

  The work may look simple enough; the
catch is that a Compliance Officer shall
be personally liable for any contravention
of those sections.
  One cannot accept an appointment as a
Compliance Officer if one is an
undischarged bankrupt or had been
disqualified under Section 130 and
Section 130A of the Companies Act, 1965.      within two years, if it is found that at the
                                              time of withdrawal, the said partner knew
n annual DEClaration                          of or ought to have known that the LLP
Section 28 of the Draft Bill proposed that    was insolvent. Insolvency is defined as             The catch word here is ‘shall not be
all LLPs shall file an Annual Declaration     the LLP either not being able to pay its         necessary’. A LLP can appoint an auditor
within 30 days following the anniversary      debt when due in the normal course of            if the Partnership Agreement provides
of the registration. The Annual               business or having negative assets.              for one, or the partners agree to appoint
Declaration is signed by the Compliance         When the LLP is wound-up voluntarily,          one.
Officer and is a declaration of solvency.     and within seven years the partners are             The Draft Bill does not define a ‘true &
The Annual Declaration shall declare that     found to have known or ought to have             fair view’. However, reference can be
at the yearend date, the LLP CAN OR           known that the LLP was insolvent, all            made to Section 166A of the Companies
CANNOT pay its debts in the normal            distributions will have to be refunded to        Act, 1965 for guidance. Section 166A
course of business when due.                  pay all the LLP’s debts. There was no            states that, for all intents and purposes,
   The Annual Declaration looks simple        such provision in the Companies Act,             the accounts being prepared under the
and innocent. The question is: will the       1965 and the Partnership Act, 1961               approved accounting standards in
Compliance Officer sign the declaration       (revised 1974). The purpose of this              compliance with the Financial Reporting
without a qualified 3rd party certifying      provision is to safeguard the public             Act, 1997 should be able to stand up to the
the LLP’s solvency?                           interest from unscrupulous partners.             “true and fair” scrutiny of the users of the
                                                                                               financial statement. We can also take
n DistriBution & ‘Claw-BaCk’                  n aCCounts & auDit                               comfort that there is a provision for
When a partner of a LLP withdraws, he         Section 29 of the Draft Bill requires a LLP      departure under Section 166A (4) in the
is entitled to receive his share of           to prepare its accounts to give a true and       Companies Act, 1965 in certain extreme
accumulated profit, if any, and his portion   fair view of the state of affairs. The section   circumstances. Hence, the Act is not
of the capital. The Draft Bill provides for   goes on to specifically say that it shall not    meant to be restrictive to the fullest
a ‘claw-back’ (refund) of that distribution   be necessary to appoint an auditor.              sense.

34   accountants today | august 2009
                                                                                                         UNLIMITED POTENTIAL

other key features of llps
n sEparatE lEgal Entity                        Register of Partners and Compliance
The Draft Bill proposed to retain the          Officer; a copy of the Partnership
concept of separate legal entity. Therefore,   Agreement, if any; a copy of the Annual
a LLP can own property, can sue and be         Declaration; and a copy of ever y
sued in its own name. From the                 correspondence with the Registrar. These
perspective of a LLP, partners can come        records are available for inspection on the
and go, but the LLP remains. This is akin      request of a partner. From the wording of
to changes in shareholders of a limited        the Bill –“on the request of a partner” – it
company.                                       looks like the records are not public

n ExClusion of partnErship aCt,
1961 (rEvisED 1974)

                                               n rEgistErED offiCE
                                                                                              >> opportunities
                                                                                                 for MeMbers
The Draft Bill specifically excludes the       Every LLP must maintain a registered             taken as a whole, the proposed draft
Partnership Act from this LLP. What this       office where all the ‘statutory records’ are     Bill on LLP meets the objectives of
means is that the rules governing the          kept. Based on the above two                     the government. What opportunities
relationship of the partners and dealings      requirements, it seems as though the             are there for practicing members?
with external parties are governed solely      secretarial service provider can levy a             although it may not be necessary
by the provisions contained in the LLP Act.    ‘retainer fee’ for these services!               for the LLP to have its accounts
                                                                                                audited, will the Compliance Officer
n formation of llp                             n Dissolution of a llp                           dare to sign off the annual
Any two persons can form a LLP. However,       The Draft Bill proposed that any partner         declaration without first getting a
a professional LLP will first need to seek     can file for dissolution by giving notice to     professional opinion on the matter?
consent from their respective associations.    the Registrar, to every partner and              the burden is heavy. First, the
A foreign LLP can also register its LLP in     publishing a notice of proposed                  accounts have to be prepared
Malaysia. Presumably, this foreign LLP         dissolution in a newspaper. If there is no       showing a ‘true and fair’ view based
will have to get confirmation from its LLP     objection, the Registrar may issue a             on accepted accounting standards,
authority in its country of origin. This       notice of dissolution to the LLP after 30        and secondly, the solvency of the LLP
part of the Draft is yet to be finalised.      days of the ‘cooling off’ period. On the         must be declared.
                                               other hand, if there is a complaint, the            the draft Bill may create new
n BankruptCy of a partnEr                      Registrar will make an inquir y to               business for practicing members.
The bankruptcy of a partner in a LLP           determine the validity of the complaint          there is now work in the form of new
does not dissolve the LLP, as may be the       and decide accordingly.                          registrations of LLPs; conversion to
case in a conventional partnership. In the       It seems from the Draft Bill that any          LLP; accepting the appointment as
case of the LLP, the bankrupt partner will     partner can file a notice of dissolution.        Compliance Officer and the related
cease to interfere in the day-to-day           This is very different from the current          statutory functions and dissolution
management of the LLP. At the same             practice of conventional partnership             works of LLP.
time, the Official Assignee will ‘step into    where the Registrar may insist that all             Indirectly, the draft Bill has also
his shoes’ and be eligible to receive all      partners be personally present to sign the       created ‘new’ audit roles for the
distributions.                                 Borang C.                                        practitioners. Since it is not
                                                 The provisions in the Draft Bill on            mandatory to have an audit for the
n on thE DEath of a partnEr                    dissolution are very much simplified as          LLP, LLPs with banking facilities or
LLP will continue to exist in the event of a   compared to those under the Companies            applying for banking facilities may be
partner’s death. The interest of the           Act, 1965                                        required to have their accounts
deceased partner will be managed by the                                                         ‘audited’ by bankers. Similarly, the
Public Trustee or the Administrator.           n ConvErsion to llp                              LLP may find comfort in having its
                                               The Draft Bill provides for the conversion       accounts ‘tax audited’. all these
n rEgistErs anD DoCumEntation                  of a conventional partnership and Sdn            ‘special’ functions can open up a
A LLP is required to keep ‘statutory           Bhd into LLP. The Draft does not provide         whole new dimension in the auditing
records’ similar to that of a limited          for conversion ‘out of ’ LLP. Should a LLP       field. n
company, but the requirements are much         decide to get ‘out’, ‘dissolution’ may be
fewer. A LLP is required to maintain a         the only answer.

                                                                                                 august 2009 | accountants today     35

Tax Implications of
Cross-border Leasing

I    n combing through various tax
     treaties, the question arises whether
     the “demise char ter par ty”—
sometimes called the “bare boat charter”
- is subject to the royalty article of the
                                               permanent establishment for the lessor
                                               in the lessee country.
                                                     Otherwise, the payment may be
                                               subject to the business profit article and
                                               hence the lessor’s country has the right to
                                                                                              basis to be subject to withholding tax not
                                                                                              exceeding 10%.
                                                                                                  Currently, the McDermott Industries
                                                                                              (Aust) Pty Ltd v Commissioner of
                                                                                              Taxation case, which was decided on 16
treaties. If not, does it create a permanent   tax.                                           December 2005, is the leading reference
establishment in the country where the              A simple example would be the             when dealing with this issue. This case
vessel will be working?                        agreement between Thailand and                 has prompted the Australian Tax Office
    Dif ferent tax jurisdictions take          Singapore which came into effect on 1          to issue several new tax rulings, most
different positions on whether royalty, as     January 1976 (Sing-Thai Agreement) and         notably the TR2007/11, TR2007/10 and
defined in the tax treaties, should include    the agreement between Thailand and             TR2007/11A.
payments for the use of or the right to        Malaysia which came into effect on 1
use industrial, commercial or scientific       January 1983 (Mal-Thai Agreement). The                  the McderMott case
equipment and whether these payments           Sing-Thai Agreement allows rental of a
would be subject to withholding tax.           vessel on a bare boat basis to be excluded        McDermott Industries (Aust) Pty Ltd
Even if that is the case, there is a need to   from the royalties article and to be subject   (MIA) is a tax resident of Australia and
check on the definition of a permanent         to provisions under the business profit        was carrying on business in Australia as
establishment in the treaty to find out        article. However, this is not the case with    an offshore marine construction and
whether the fact that the vessel is in the     the Mal-Thai Agreement, which allows           engineering contractor. In the course of
other country means that it creates a          the rental of the vessel on a bare boat        business, it chartered vessels from

36   accountants today | august 2009
                                             TAx IMPLICATIONS OF CROSS-BORDER LEASING ARRANGEMENTS

        vessel leasing terMinology and                          master and crew will be regarded as the servants of the
           the taxation iMplications                            charterers.
                                                                    Under such a circumstance, the payments are generally
    Section 12 (7) of the Singapore Income Tax Act (Chapter     regarded as royalty, being an amount paid as consideration
50) and Section 109B of the Malaysian Income Tax Act, 1967      for the use of or the right to use the ship. This may attract
reserves the taxing rights in respect of the “rent or other     royalty withholding tax.
payments under any agreement or arrangement for the use
of any moveable property.” This allows the taxing authorities                    tiMe charter party
of the country to impose withholding tax on payments made
to non-tax residents.                                                Time charter party is an agreement whereby the ship
    In the business of offshore marine construction, it is      owner retains possession and allows the ship for an agreed
generally the vessel which is of concern and not the goods      time to be at the disposal of the charterer, who is free to
that the vessel is carrying. There are two broad types of       employ the ship for his own purposes within the permitted
charters, i.e.                                                  contractual limits of the charter party.
    a.    Demise charter party                                       There are various case laws which attempt to define
    b.    Time charter party                                    what a time charter party means in modern usage. The
                                                                cases include that of Whistler International Limited v
                deMise charter party                            Kawasaki Kisen Kaisha Limited, which was decided by the
                                                                House of Lords on 7 December 2000.
    Demise charter party is generally defined as an agreement        While a charterer has the right to use the ship and to
whereby the ship owner transfers to the charterer for a         use the carrying capacity of the ship, the true nature of a
period of time both the possession and the navigation of the    time charter is generally acknowledged to be the provision
ship. One main characteristic of the demise charter party is    of transportation services by the ship owner to the charterer.
that the charterer takes possession and control of the ship.         Under such a circumstance, the payments are generally
How are we going to determine this?                             regarded as payment for services.
    This is called the “whose servants the master and crew           A “charter party” means an agreement between the ship
were” test. Generally, if the control of the master and crew    owner and the charterer regarding their rights and
in the navigation of the ship passes to the charterer, the      obligations.

                                                                                         august 2009 | accountants today         37

Chartering Company Singapore Pte Ltd            of the Singapore – Australia treaty.                         the decision
(CCS), a Singapore tax resident company.        Furthermore, MIA argued that CCS was
    It should be noted that CCS does not        deemed to have a permanent establishment          The Federal Court of Australia ruled in
have any offices, staff or facilities in        (PE) in Australia by virtue of Article 4 (3) favour of MIA in the McDermott case on
Australia.                                      (b) of the said treaty. As CCS is deemed to  the basis that CCS was deemed to have a
    The two sides had entered into              have a PE in Australia, the charter fees     PE in Australia by virtue of Article 4 (3)
various lease agreements but none of            should be taxed in Australia under a normal  (b) of the DTA. In addition, the charter
them contained any requirement that the         assessment and not by way of withholding.    fees were business profits. Therefore, the
vessels be engaged or used in Australia.        The payment is not royalty under Article 10  charter fees should not be taxed by
The agreements stipulated that the              (3) (a) (ii) of the said treaty.             withholding but on a normal assessment
chartering had to be on the                                                                               basis. From the corporate tax
bare boat basis.                                                                                          returns, the charter fees were
    In the year of assessment                                                                             an allowable deduction to MIA
in which the char ter fee              The substantial equipment provision arose in                       in computing its taxable income
was paid to CCS, MIA did                                                                                  for Australian tax purposes.
                                         the Australia - USA treaty of 1953 and the
not deduct or remit to the                                                                                    As a result of this case,
Australian Commissioner                    version of the royalty article referring to                    taxpayers in the vessel leasing
of Taxation (ACT) the
                                      payments for the use of industrial, commercial line should note that:
withholding tax in respect of                                                                             a.       Article 4 (3) (b) is a
the charter fees paid to CCS.            or scientific equipment in the UK treaty of                      deeming provision, i.e. it
Furthermore, it claimed the                                                                               deems that a Singapore entity
                                       1967 (which did not include any reference to
charter fee payments as tax                                                                               has not only a permanent
deduction in its own tax                 the substantial equipment). The Singapore                        establishment in Australia but
returns.                                                                                                  also is carrying on a trade or
                                        treaty was the first to combine the two and
    In reviewing the returns,                                                                             business in Australia if
the ACT decided that the               thereafter became standard Australian treaty                       substantial equipment (such
payments were royalty in                                                                                  as a ship) is being used in
                                        practice until the 2001 US protocol and the                       Australia by, for or under
nature pursuant to Article 10
(3) (a) (ii) of the Singapore –          2003 UK treaty dropped equipment leasing                         contract with an Australian
Australia treaty and hence                                                                                enterprise.
                                                      from the royalty article.                           b.       Article 4 (3) (b) applies
were subject to the reduced
10% withholding tax. The                                                                                  not only to active income but
standard royalty withholding                                                                              also to passive income. Even
rate is 30%.                                        Article 4 (3) (b) of the treaty is            though CCS does not have any
    As the required withholding tax was         reproduced as follows:                            employee or office in Australia or
not paid to the ACT, MIA was denied the             “3. An enterprise of a Contracting State      does not use the equipment actively in
tax deduction for the charter payment.          shall be deemed to have a permanent               Australia, it is deemed that Article 4
                                                establishment and to carry on trade or            (3) (b) will apply as this Article does
                   the issue                    business through that permanent                   not differentiate between active or
                                                establishment in the other Contracting            passive income. Hence charter fees
    The issue that was brought before the       State, if –                                       will be regarded as business profit by
various courts in Australia, including its      (a) it carries on supervisory activities in       virtue of Article 5 (1) and Article 10
Federal Court, was whether the payment              that other State for a period or periods      (4).
made by MIA was subject to royalty                  aggregating more than 6 months           c. Article 4 (3) (b) does not stipulate a
withholding tax at the reduced 10% rate as          within any 12-month period in                 time limit.
per the treaty with Singapore as contended          connection with a building site, or a    d. No active part is required from the
by the ACT.                                         construction, installation or assembly        lessor in using the substantial
                                                    project or any combination of them            equipment in Australia.
      the counter-arguMent                          which is being undertaken in that
                                                    other State; or                               Although the decision was in respect
    MIA did what it did because, it             (b) substantial equipment is being used in   of a case involving the Singapore and
contended, the charter fees fell within the         that other State by, for or under        Australia treaty, it has an implication on
definition of business profit under Article 5       contract with the enterprise.”           all existing treaties that Australia has with

38   accountants today | august 2009
                                                        TAx IMPLICATIONS OF CROSS-BORDER LEASING ARRANGEMENTS

other countries.                                 is of the utmost importance. Although the             (see Article 4 (4) (b)) for which
    The substantial equipment provision          case mentioned deals only with the                    the Australian courts may take the
arose in the Australia - USA treaty of 1953      Singapore – Australia treaty and only in              same stance taken in the
and the version of the royalty article           respect of equipment, courts around the               McDermott case should a similar
referring to payments for the use of             world may view the decision reached as a              issue come up. Similarly, your
industrial, commercial or scientific             persuasive one. As such, care needs to be             Malaysian company could be
equipment in the UK treaty of 1967               exercised when it comes to cross-border               assessed in Australia on a net
(which did not include any reference to          leasing arrangements.                                 assessment basis.
the substantial equipment). The                      If you are into cross-border leasing         •	 In	 a	 back-to-back	 agreement	 with	
Singapore treaty was the first to combine        arrangements on a bare boat basis, it would           the Netherlands, you may be
the two and thereafter became standard           be advisable to take note of the following:           caught in the same light as the
Australian treaty practice until the 2001        a. You may wish to revisit the various                Malaysia – Australia treaty and the
                                                                                                       Singapore – Australia treaty.
                                                                                               b. If you have been assessed on a
                                                                                                  withholding tax basis on the use of
                                                                                                  substantial equipment in Australia, an
                                                                                                  assessment may be more appropriate
                                                                                                  if you have taxes overpaid and refunds
                                                                                                  due from the Australian Tax Office
                                                                                                  based on the McDermott case.

                                                                                                   Since the McDermott case, the
                                                                                               Australian Tax Office (ATO) has issued
                                                                                               various tax rulings supported by various
                                                                                               examples to clarify certain scenarios that
                                                                                               may arise as a result of the various treaties
                                                                                               Australia has signed with other countries.
                                                                                               a. The ATO issued Tax Ruling 2007/10 to
                                                                                                   address the “concern” of the newer
                                                                                                   treaties like the US, UK and Norway.
                                                                                                   For example, the Norwegian treaty,
                                                                                                   which came into force on 1 January
                                                                                                   2008, excludes from the definition of
                                                                                                   royalties any payments or credits in
                                                                                                   respect of the use of, or right to use,
                                                                                                   industrial, commercial or scientific
                                                                                                   equipment. So does the 2001 Protocol
US protocol and the 2003 UK treaty                  agreements signed with Australian              US Australia treaty and the 2003 UK
dropped equipment leasing from the                  entities and identify any tax risk             Australia treaty.
royalty article.                                    exposure such as those in the              b. In view of the McDermott case and
    One interesting fact is that royalties          McDermott case.                                also some of the older treaties that
were previously taxed on a net basis                •	 Singaporean	 companies	 like	 CCS	          have yet to be amended in line with the
under Australian laws prior to 1992 unless              may need to relook at leasing              McDermott case, the ATO issued Tax
the tax on a net basis at the corporate rate            agreements with another country            Ruling 2007/11 in December 2007 to
exceeded 10% of the gross payment. After                like New Zealand (See Article 4            consider the imposition of Australian
that, the royalties were taxed on a gross               (4) (b) of the New Zealand -               royalty WHT or income tax on non-
basis. Hence, the confusion.                            Singapore treaty of 1973).                 resident head lessors. Furthermore,
                                                        Singapore tax could be assessed            this new ruling does not apply to the
   More advice for bare boat                            on a net assessment basis rather           arrangement for provision of services
           leasing                                      than by withholding.                       but to all types of substantial equipment
                                                    •	 For	 Malaysian	 companies,	 there	          (including vessels) and all head
    When leasing vessels on a bare boat                 are identical articles appearing on        lessors (both treaty and non-treaty
basis, it is important to realise that clarity          the Malaysian-Australian treaty            countries). n

                                                                                                    august 2009 | accountants today      39

      fluiDity AND vErsatility WILL BE THE HALLMARKS OF

                he future of business can be summed up,    emergence of such organisations has been
                more or less, in two words: fluid and      facilitated by major changes in relationships with
                flexible. Innovation in the form of        suppliers. The traditional approach of seeking
                advanced operational systems and           suppliers by formal legal and fully-specified
      flexible organisational technologies has created a   tenders has been substituted by more subtle
      whole new form of business enterprise. As a          partnerships. The emphasis is now on substantial
      result, these developments have given companies      information exchanges between parties including
      the nimbleness to meet the pressures of the          full knowledge of the cost structures and
      modern business world from global integration        production activities of all parties. Today, suppliers
      to worldwide competition and complex supply          may participate in the purchasing organisation’s
      chains. All the signs indicate that companies are    planning and may even contribute to designing
      seeing the value of developing greater versatility   the production technology and the product itself.
      in the future.                                       Trust is therefore a key component.
          By their definition, fluid organisations can         The customer relationship is also being
      assume different forms. They can be informal         transformed by these changes. Fluid and flexible
      groupings of firms or parts of firms seeking         firms founded on a strong digital platform now
      to achieve specific shared objectives. Such          give customers direct access to collaboration
      groups emerge when the legal, managerial and         infrastructures. Businesses may co-create their
      governance structures of the parent firms are        products with the customer or they may go
      altered to allow more immediate entrepreneurial      further and allow total product creation. Although
      or innovative activity.                              enterprises may not pre-design the consumer
          These groups may come together to allow          experience with the product, they still invent
      access to skills not possessed by some of the        the broad product concept and orchestrate the
      parent firms. The result is the creation of a        achievement of the product’s potential via the
      portfolio of skills which enables the group to       consumer. Increasingly, a variety of industrial,
      move into novel areas of activities, risk bearing,   service-based and digital products are now
      financing and the development of large projects or   created directly via customer input and design.
      new products that would otherwise be unviable.           At the forefront of this revolution, consumers
          Unlike traditional corporate structures, fluid   have turned into ‘pro-sumers’ who co-innovate
      entities are bound together by shared endeavours     products, ser vices and, most essentially,
      and continuously orchestrated interfacing. The       experiences, with producers. Experience is

40   accountants today | august 2009
                                          THE FUTURE OF BUSINESS

The future
of business
Alnoor Bhimani and Michael Bromwich

                                      august 2009 | accountants today   41

increasingly becoming part of the                    neW challenges for                        and which rely more extensively on
consumer package. Apple Inc invented               ManageMent accountants                      trust between partners. This has to be
the iPod but users create their own                                                            done whilst still providing appropriate
experiences with the product by loading         Co-creation of products is not a choice        performance reports.
it with independently created podcasts,         but a necessity for many business models.          In the mid-‘90s, fluid organisations
shows, music etc. Likewise, Facebook.           This is because product choices are            appeared on the horizon. Today, we are
com developed the platform for users to         infinite and cannot be conceptualised or       seeing a rapid evolution in their
stage their own unique experiences.             delivered by one ‘producer’. This is           development. The challenge for
     In other sectors, similar engagement       coupled with the fact that the product         management accountants is to seek solid
is now commonplace. Toy firm LEGO               created by the consumer is often not           grounding in knowledge about the
takes part in ‘distributed co-creation’         in fact the product that is ultimately         technology available to, and deployed by,
where customers are invited to suggest          generating the firm’s revenues.                businesses. Management accountants, it
new products while car manufacturer             Management accountants have a new              is anticipated, will aim to become skilled
Peugeot recently asked for public input         role here in determining the costs and         in appraising the benefits, costs and
for a new vehicle. IBM has adopted the          profitability of satisfying the specific       contextual issues of different customer
open operating system Linux for some of         consumer preferences. They will need to        supply networks and supply chains and
its computer products and systems and           cost the product attributes developed          report appropriately. This is a formidable
this platform is continuously improved by       with, or by, consumers as well as analyse      challenge but it is a fascinating time to be
a wide-ranging community of systems             plausible revenue propositions that may        in business as we see technologies that
software developers. Different companies        be dissociated from the consumer created       were originally viewed simply as leisure-
may try a variety of approaches but             products.                                      time activities now becoming essential
ultimately what facilitates this new attitude       In order to contribute to this new         components of the business process. n
to innovation is the rise of the web as a       business process generally, management
participatory platform.                         accountants will want to become part of
     This puts a new dynamic on the             management and operational teams and
                                                thus need to become business partners.         Professor Alnoor Bhimani is Professor of
concept of costing. In the context of the
                                                To do this, they will need to understand the   Management Accounting at the London School
electronic platform, the content of the
                                                technology underlying the organisation         of Economics. Professor Michael Bromwich was
website is generated by the consumer but
                                                and learn to cope without at least some        the Chartered Institute of Management
it is the advertisements on the interactive
                                                of the conventional formal management          Accountants’ Professor of Accounting and
platforms between users that form the
                                                control structures or systems.                 Financial Management at the London School of
revenue source. In this situation, pricing
                                                    In supply partnerships, management         Economics and Political Science from October
and costing issues do not follow a
                                                accountants will focus on designing            1985 to 2006, now emeritus. Professor Alnoor
traditional model which may be cost-plus
                                                information systems that allow more            and Professor Michael were present at the CIMA
based or market-based. Rather, the
                                                ready exchanges of information between         World Conference 2009.
pricing has to link directly into the
strategy of the firm and its revenue-           parties. They will also need to become
generating model where the product that         comfortable with operating in regimes          Management Accounting: Retrospect and
is costed does not directly align with          which may have more infor mal                  Prospect will be available at www.
where sales are generated.                      management and governance structures  at the end of July.

42   accountants today | august 2009

         august 2009 | accountants today   43

                       Islam in
   Nazatul Izma


             ccording to Islamic tenets,            This shift towards covering up of-       year on such clothing.
             Muslim women who have              fers tremendous opportunities to tap the         Increased interest in discovering and
             reached puberty must cover         market for Islamic clothing, she adds.       defining one’s Muslim identity is also
             their awrah, defined as all        “Drawing on our experience in the halal      spurring the market. “It’s hard to be pre-
 parts of the body which must not be ex-        industry, there are an estimated 1.6 to      cise without statistical studies, but there is
 posed, except the face and hands. Guide-       1.8 billion Muslims in the world, and this   no doubt that amongst Muslims through-
 lines for modesty typically refer to gar-      number is booming because Islam is esti-     out the world there is a religious revival
 ments that are not transparent and not         mated to be the fastest growing religion     going on, with more and more people re-
 form-fitting and veils or hijab for the hair   in the world, whether by birth or conver-    turning to their practice of Islam. This will
 should be opaque and long enough to            sion.” Although there are no solid num-      naturally entail an increased adherence to
 cover the bosom.                               bers for market potential, guesstimates      Islamic modesty norms. In the US and the
     “There certainly are many more Mus-        from the International Herald Tribune        UK, there is definitely a trend amongst
 lim women covering themselves today,           valued the global Muslim market for con-     the younger Muslim generation in partic-
 probably due to heightened awareness of        servative clothing at about US$96 billion    ular to find out more about their religion
 the religious requirements,” notes Jumaa-      a year in 2007, assuming that 50 per cent    and to start practicing it,” relates Anas
 tun Azmi, managing director of Kasehdia        of the world’s 1.6 billion Muslims dress     Sillwood, managing director of SHUKR,
 Sdn Bhd.                                       modestly and that they spend US$120 a        via e-mail.

 44 accountants today | august 2009
44 accountants today | august 2009
                       ISLAM IN VOGUE

    Amplified coverage of women who
cover in the media could also account for
the rebirth of interest in hijab. In Europe,
MSLM, a glossy trilingual fashion maga-
zine for young Muslim fashionistas was
launched in Rotterdam in 2007. Locally,
there are a slew of Malay-medium maga-
zines which devote pages to muslimah
fashion as well as the latest trends in hi-
jab, such as Aniqah, Nur, and
Fiction too has been written about the tri-
als and tribulations of teens covering up,
such as “Does My Head Look Big in This”
by Australian Randa Abdel-Fattah.

    Since the availability of modest yet
fashionable clothes was scarce initially,
savvy companies quickly spotted the po-
tential in this niche market as demand
grew. “Many Muslims living in the West
are keen to adhere to their religious com-
mitments to modest dress, but they have
great difficulty finding modest choices
from mainstream clothing companies –
clothing items are too tight, too short,
don’t have sleeves, have low necklines
etc,” noted Sillwood. SHUKR itself was
established as a wholesale clothing busi-
ness in 2001 and launched its own retail
division selling contemporary clothing
catering to Islamic dress codes online in
the US in 2002. The brand now sells to
customers from over fifty countries, with
Australia ranking as its largest interna-
tional market outside of our main markets
of North America and the UK. Shipping
costs, rather than the sterling’s high ex-
change rate vis-à-vis other currencies are
the major deterrent to sales.

     august 2009 | accountants today     45

     Today, Shukr has plenty of company                                    Muslims formed a ready market for halal
both in the online and physical sphere                                     processed meats, cold cuts and cheeses;
from larger and smaller retailers. Over                                    in other words, they wanted to consume
here in Malaysia, upmarket Malaysian                                       permissible foods that were a familiar
boutique Sri Munawwarah offers a line                                      part of their own culture. Similarly, Mus-
of clothing for pilgrims in addition to                                    lim women in non-Arab and Western cul-
contemporary Islamic clothing. getGor-               Over here in          tures hunger for contemporary modest
geous, run by Malaysian sisters, targets         Malaysia, upmarket        clothing that allows them to integrate
fashion-conscious Muslim women online.                                     into local environments and ease daily
                                                 Malaysian boutique
Even smaller entrepreneurs hawk hijab                                      activities such as work and sports. Let’s
and jilbabs (Arab-style flowing robes)
                                                  Sri Munawwarah           face it; golf, basketball and swimming are
over eBay.                                     offers a line of clothing   hampered by traditional long robes. This
     Just as in other segments of the fash-    for pilgrims in addition    led to the creation of Muslimah swimsuits
ion industry, it’s clear that what women      to contemporary Islamic      like the burqini and sportswear by compa-
want is choice, as well as clothes that al-                                nies such as Australia’s Ahiida. Sillwood
                                                       clothing.           too is trying to help Western Muslims
low them to assimilate and keep up with
lifestyle trends. Drawing a parallel with                                  fit in. “SHUKR is attempting to provide
food, Jumaatun points out that European                                    culturally-relevant Islamic clothing; that

46   accountants today | august 2009
                                                                                                                    ISLAM IN VOGUE

                                                                                                 SHUKR is attempting to
                                                                                                provide culturally-relevant
                                                                                                 Islamic clothing; that is,
                                                                                                   clothing which meets
                                                                                                 Islamic requirements of
                                                                                                  modesty, but which is
                                                                                                     also beautiful and
                                                                                               appropriate for the daily lives
                                                                                                     of Muslims living
                                                                                                        in the West.

                                                                                               food production and processing. Islamic
                                                                                               banks need to meet minimum capital re-
                                                                                               quirements and muster regulatory ap-
                                                                                               proval and banking licenses, among other
                                                                                               criteria. Food producers need to ensure
                                                                                               their value chain and end-products comply
                                                                                               with halal certification standards, such as
                                                                                               those set by Malaysia’s JAKIM (Depart-
                                                                                               ment of Islamic Development) or IFANCA
is, clothing which meets Islamic require-      which open stores selling exactly the same      (Islamic Food and Nutrition Council of
ments of modesty, but which is also beau-      styles that are being offered in their stores   America). “There are no halal standards
tiful and appropriate for the daily lives of   in London, Paris and New York,” explained       for Islamic clothing, as long as garments
Muslims living in the West.”                   Sillwood.                                       abide by Islamic principles of modesty and
     But it’s not just women in Western            But this business isn’t plain sailing.      are constructed from permissible materi-
cultures who want choice. The hunger is        Although the market is believed to be           als,” says Jumaatun.
apparent even in countries with sizeable       sizeable, competition may be fierce both            Like their conventional counterparts,
Muslim populations and cultures where          from purveyors of Islamic clothing as well      Muslimah garment retailers aren’t im-
modest clothes are readily available. “In-     as secular garments. “A lot depends upon        mune to the global recession and have
terestingly, there is a big demand for our     definitions. What exactly is Islamic cloth-     fashioned strategies to cope. “We have
clothing in traditional Muslim countries.      ing, and how does it differ from main-          been pursuing a two-fold strategy to man-
We have physical SHUKR retail stores in        stream clothing? Is a customer buying a         age the impact of the crisis. Firstly, in
Syria, and are soon opening a SHUKR fran-      long, flared skirt from Nordstrom buying        our Western markets we are discounting
chise in Jordan. The people of these lands     Islamic clothing? How about a sleeveless        deeply, even if we do not make any profit,
are also interested in contemporary fash-      maxi dress which is worn over a long-           but rather to just stay afloat. Secondly,
ion, but there are very few local producers    sleeved t-shirt?” asked Sillwood.               we are focusing our attention on opening
catering to modest, contemporary design.           Barriers to entry in the garment indus-     up new markets outside of the West,” ex-
Instead, there are just Western franchises     try aren’t as high as in Islamic finance and    plained Sillwood. n

                                                                                                    august 2009 | accountants today    47
      book review
                                 principles and conteMporary
                                 issues in internal auditing
                                 Puan Sri Datin Dr. Mary Lee, Dr. Hasnah Haji Haron, Dr. Ishak Ismail, Dr. Mohd. Hassan
                                 Che Haat, Norlela Zaini, Tong Seuk Ying, Lok Char Lee, Mohd. Farook Nasar

                                 this book provides readers with an overview of the         Code of ethics and the International Standards for
                                 latest developments and various contemporary and           the Professional Practice of Internal auditing) and the
                                 contentious issues in internal auditing. It gives a good   Strongly recommended Guidance (such as the Position
                                 understanding of the role and responsibilities of an       Papers, Practice advisories and Practice Guides).
                                 internal auditor as one of the governance partners
                                                                                            the book is a joint effort of academicians from
                                 and value-adders in an organisation. It highlights the
                                                                                            Universiti teknologi Mara, Universiti Sains Malaysia,
                                 importance of the internal auditing function in risk
                                                                                            Universiti Malaysia terengganu and practitioners in
                                 management, controls and governance.
                                                                                            internal auditing. the authors recognise that there is a
                                 With the latest amendments issued under Para 15.18         need for more local and affordable books on internal
     ISBN 978-983-3850-67-9      of Bursa Malaysia’s (amended) Listing requirements         auditing. In this regard, the authors hope that their

       Paperback / 356 pages     on 31 January 2008, mandating internal audit function      concerted efforts in writing this book would contribute
                                 for all public-listed companies, there is a need for       to promoting the significance of internal auditing and
         RM59.90                 greater understanding of the internal audit function
                                 as one of the means of safeguarding shareholders’
                                                                                            also encourage continuous professional development
                                                                                            in this area. the authors also feel that they should share
                                 interests. this book also incorporates the new IIa’s       their knowledge and experience on internal auditing
                                 International Professional Practices Framework (IPPF)      to meet the motto of the Institute of Internal auditors,
                                 which includes the Mandatory Guidance (such as the         “Progress through Sharing”.

48   accountants today | august 2009

         august 2009 | accountants today   49
lifestyle | FASHION

                                       ll intelligent interface
                                       The Tag Heuer Link Calibre S disposes of the traditional
                                       three counters of a chronograph for a new take on style.
                                       An innovative and intuitive interface displays the times
                                       measured: the central hands (hours, minutes, seconds)
                                       exhibit the time and fulfill chronograph functions to
                                       provide a time display of unrivalled simplicity. Press
                                       the crown to change from one mode to the other, and
                                       use the central hands for easy-to-read displays in both

                                       ll very virtuous
                                       Traditional savoir-faire meets an innovative spirit in Da-
                                       vidoff Very Zino automatic chronograph. The timepiece
                                       combines such materials as red gold, PVD-finish and
                                       rubber to replace the traditional leather strap. Features
                                       include a 46-hour power reserve and a self-winding me-
                                       chanical ETA Valjoux 7750 movement.

                                       ll futuristic fare
                                       Themes of air, space and supersonic speed merge in
                                       Richard Mille RM 021 Tourbillon “Aerodyne”. The first
                                       watch created with a composite baseplate utilising a

                                       titanium exterior framework in combination with hon-
                                       eycombed orthorhombic titanium alumide and carbon
                                       nanofiber. These new group of alloys are used by NASA
                                       researchers for developing supersonic aircraft wings. The
                                       timepiece itself boasts of a manual winding tourbillon
                                       movement with hours, minutes, power reserve, torque
                                       indicator and function selector.

                                       ll pure classic
                                       Purist fans of chronograph watches will be delighted that
                                       the Breitling Caliber B01 employs a column-wheel de-
                                       vice, the hallmark of the finest mechanical chronograph
                                       movements. Distinguishable by its vertical coupling
                                       clutch ensuring perfectly “clean” start-ups with no jump
                                       of the hand, the watch guarantees maximum precision,
                                       reliability and functionality. Available in four versions: all-
                                       steel, steel with a bezel bearing four solid gold quarter-
                                       hour markers; steel with a gold bezel, and all-gold.

50   accountants today | august 2009
                                                         WRIST CULTIST

                     ll soliD lines
                     B.R.M. CT-48 Chronograph is styled in a 48mm over-
                     sized case with modular construction in titanium and
                     stainless steel. Employing movement suspended by
                     three carbon fiber triangles set on three springs, it also
                     has an isolastic system®, certified by B.R.M, that allows
                     for sinuous movement on the carbon arms. Identi-
                     cal to an engine separated from its chassis by silent
                     blocks, pressurised springs keep the arms suspended
                     in the case, isolating the movement from any shock or
                     interference vibration. Available in three hand colours:
                     red, yellow and orange.

                     ll custom chiseleD
                     The Corum Admiral’s Cup Challenge 44 is richly deco-
                     rated with red gold accents for a powerful yet elegant
                     timepiece. It houses Caliber CO753, a mechanical self-
                     winding chronograph movement that is chronometer-
                     certified by the COSC – a guarantee of precision and
                     reliability. Powering chronograph functions as well as
                     the date at 4.30 in addition to conventional hour, min-
                     ute and seconds indications, this movement is graced
                     with an oscillating weight, in black or grey PVD finish.
                     In limited editions of 188 pieces for the black PVD ver-
                     sion and 128 pieces for the grey PVD version.

                     ll ancient lore

                     Twelve masks from a private museum collection are
                     recreated on a small scale for Vacheron Constantin
                     Metiers d’Art ‘Les Masques’ collection. Each mask is
                     surrounded by a poem in prose written by Michel Bu-
                     tor, a French writer. An exercise in art and engineering,
                     Vacheron Constantin watchmakers applied a highly
                     sophisticated technique of vacuum metalisation, hav-
                     ing sprayed the gold letters onto the crystal. A total
                     of 300 Vacheron Constantin watches will be available
                     for most avid connoisseurs and collectors.
ENGINEERING AND      ll perfect partners
DESIGN, WATCHES      The Parmigiani Fleurier Pershing one-one-five aquatic
                     chronograph pays tribute to power, speed, innovation
REMAIN MEN’S         and performance, associated with Pershing, a high-
LUxURIOUS DISPLAY    luxury Italian boat-constructing company, found on
                     the list of the leading boat-builders of today. Created
WHEN IT COMES TO     as a limited edition, the case-back of the watch reveals
STYLE AND FASHION.   the engraved illustration of the Pershing 115’ yacht.
                     Crafted in 18 carat rose gold or 950 Palladium, the sty-
                     listic details of the timepiece includes the self-winding
                     chronograph movement Caliber PF 190.

                                    august 2009 | accountants today         51
lifestyle | ART

                  Circle           Anis Ramli
  At some point in life, we’ve all thought of leaving the
    corporate world in pursuit of more personal and
 fulfilling dreams. Well, while some of us are dreaming
          away, one person has made it a reality.

         n Zainal Abidin Musa’s art studio        the Balok beach in Terengganu, the
         is a painting of a long wooden           sunrise in Mersing and the Langkawi
         bench by a grilled window through        islands. The visual feast is a diary of the
         which the setting sun seems to           journey he has taken since leaving the
         glow and burn, casting shadows           advertising industry to pursue art.
on the wall. Though the subject matter                Though it was quite an about-turn, the
may look ordinary to some, the painting,          career move brought Zainal full circle to
titled Lazy Sunday II, is one that holds          his original passion in fine art, for which
great significance to Zainal.                     he studied and received a degree from
     It was completed in 1999 at a time           the MARA Institute of Technology (ITM)
when he was weighing the decision of a            in 1983.
career transition from advertising to art,            But since the nation was on the verge
potentially giving up financial stability for a   of an economic recession at the time, all
more personally rewarding endeavour.              artistic ambitions had to be abandoned
The symbolisms are clear                                         temporarily. Or so he
now in hindsight, but Zainal                                     thought. His foray into the
claims, “It was never                    I PAINTED               corporate world lasted
planned. I painted whatever             WHATEVER I               almost twenty years. During
I could find within my                 COULD FIND                that time, the peers who
immediate surroundings.”                WITHIN MY                graduated with him from
     Zainal has since left the          IMMEDIATE                the School of Art and
rat race for good. Now,            SURROUNDINGS.                 Design, the likes of Juhari
you’re likely to find a much        - Zainal Abidin Musa         Said and Awang Damit,
more tranquil person,                                            were steadily making a
pottering about his home                                         name for themselves within
studio, surrounded by plants, paints,             the art circles in Malaysia and abroad.
brushes, canvas and easels.                           Regretting none of his time in the
     On his walls are more of his paintings       business world, Zainal says, “Everyone
-- the Belum rainforest, the Janda Baik           takes their own paths and this was mine.
waterlilies, the Pulau Perhentian sunset,         In a way, the years spent in advertising

52   accountants today | august 2009
                           FULL CIRCLE

were necessary towards making me the
artist I am today.”
    The career change wasn’t so much a
turning point than a smooth and gentle
transition that began with weekend trips
away from the office to quietly enjoy the
sceneries around Malaysia. Slowly, they
rekindled his long-forgotten passion for
painting, further inspired by the beautiful
landscapes of the east coast.
    Soon, together with travel partner and
fellow artist, Suhaimi Abdul Wahab,
Zainal was making longer trips and
venturing farther away from Kuala
Lumpur. Together, they journeyed around
Malaysia, painting outdoors like the plein
air artists of the 19th century such as
Monet and friends.
    From these therapeutic weekend
travels and exercises in paintings, Zainal
found himself with enough paintings to
hold a solo exhibition, aptly titled
Weekends, which he held at The New
Straits Times’ Balai Berita in 2003.
    His sudden emergence after such a
long absence surprised his artist friends
whom he hadn’t met since graduation.
More so because here was Zainal clearly
going against the grain with his landscape
paintings, when current artistic trends

     august 2009 | accountants today    53

leaned towards abstract and contemporary
     His landscape paintings captured the
visceral sensations of place and time. His
colours conveyed the suffused light of the
sunset, the coolness of the beach at dawn,
the atmospheric quality of a particular
place and time.
     Tengku Sabri, an artist friend,
acknowledges Zainal’s choice of subject
matter in his book, Tanpa Tajuk: “He
chose to ignore the contemporar y
excitement of experimenting, exploring
and working with “modern” or
“expressive” images and approaches as
practised by many artists of today. He
hung on to his romantic attitudes in
reading and representing landscapes.”
     For anyone who knows Zainal, this
was another full circle for the artist. His
childhood years were spent with fantasies
and imagination amidst the jungles, rivers
and paddy fields of Batu Gajah and Parit
in Perak. Naturally,
his love for nature                                             Kemasik’s beaches have       with preliminary drawings of places like
and art manifested                 HE HAS TAKEN                 long gone. The coconut       Penarik, Kuala Besut, Kemaman, Kuantan,
itself in landscape           WHAT IS CONSIDERED                trees that once shaded the   and Mangkuk – all beautiful places that still
paintings that were               A TRADITIONAL                 beach at Abdul’s chalets     remain a secret from society at large. These
evocative of that             SUBJECT MATTER AND                on Pulau Perhentian          he will work on in due time.
wonderful and happy            COMPOSITION, AND                 Besar no longer stand             At the moment, he is busy completing
period in his life.             INFUSED IT WITH A               there. The beach views of    the Belantara series which are landscapes
     Already,      some             FRESH AND                   Teluk Cempedak have          of the jungles and forested areas in
have labeled Zainal as           CONTEMPORARY                   now been unceremo-           Malaysia. The first piece that started it all
“the landscape artist.”          INTERPRETATION.                niously blocked by           was The Belum Moth, the winning entry
He has taken what                                               Western influences the       in the Passions International Art
is consider ed a                                                likes of a red-headed        Competition in 2007.
traditional subject                                             clown and a white haired          While the Weekends series and his
matter and composition, and infused           old man.                                       previous landscapes featured vast spaces
it with a fresh and contemporar y                 Fortunately, some of these places have     and a silent quality about them, the
interpretation. His landscape pieces have     been documented in Zainal’s Weekends           Belantara works are quite different. These
a timeless quality about them, and yet        series. Out of almost 30 paintings exhibited   are compositions of thick, layered colours
show a relevance to current market            during the show, only a handful are with       and intense strokes to represent the
preferences.                                  him now. These precious few works,             denseness and impenetrable quality of
     It is a niche role that he is happy to   including Lazy Sunday II, are the only         our jungles that conceal and enshroud
fulfill as long as there are landscapes still records left of a time and place that once     years of time and life.
that touch and inspire him. Sadly, many of    existed in Zainal’s life.                           Perhaps it will be another landmark
the places he visited during those                On a recent exploration of the east        development for the artist, only time will
weekends long ago no longer exist in the      coast, Zainal has made some new                tell. In the meantime, Zainal is just happy
glory by which he remembers them.             discoveries. His sketch books are now filled   to be painting. n

54   accountants today | august 2009

         august 2009 | accountants today   55
lifestyle | FOOD

Cuisine with a
conscience                             PRODUCE PICKED FRESH FROM THEIR
                                       OWN VEGETABLE PATCH, FISH FISHED
                                       SUSTAINABLY. THESE ARE THE HALLMARKS OF
Anis Ramli                             THE HOME COOKING OF YORE; OR IS IT?

                                       A                   t Jellyfish Restaurant in Brisbane’s upmar-
                                                           ket CBD area, restaurateur Tom Kilroy
                                                           would like diners to not just come for the
                                       fish – up to eight different fish are made available daily – but
                                       hopefully go home more educated about what they eat. The
                                       skeptics, of course, will surely ask: “What’s the big deal about
                                       fish?” Plenty apparently.
                                           When Kilroy first began toying with the idea of opening
                                       a restaurant that focused on fish (although non-fish eaters
                                       can order from the likes of duck, beef and chicken from the
                                       menu), he discovered that 82 per cent of fish eaten in Australia
                                       is imported or frozen. Not only that, but how fish taste upon
                                       ending on the plate is also affected by how they are handled
                                       after being caught.
                                           So at Jellyfish, where glass windows give a sweeping view
                                       of the calm Brisbane River, fish are listed alongside sugges-
                                       tions of how best to cook it: seared, steamed, oven-roasted,
                                       with sauces and sides. Of course there’s crumbs and batter
                                       fry, stylised with saffron, curry or tarragon or crumbs fla-
                                       voured with parmesan, szechuan pepper and sesame seed,
                                       but with meticulous study akin to rocket science, Kilroy would
                                       ensure that only the right fish gets to be crumbed and bat-
                                       tered to maximise taste and texture.

56   accountants today | august 2009
                                                                            CUISINE WITH A CONSCIENCE

                             To ensure he gets the freshest fish,      scious and discerning diners. A recent
                         Kilroy not only serves line-caught fish       survey in the UK for example cited that
                         of Australian waters, but also fish that      90 per cent of diners are willing to pay
                         are fished sustainably. Says Kilroy, “We      more if they could get restaurants to put
                         have an extremely strict fish buying pol-     sustainable fish on their plate.
                         icy – we never buy endangered species             The sentiments do not just stop at
                         or fish in its breeding season.” Kilroy       fish, however. When member chefs from
                         works with fishermen that come from           the American Culinary Federation recent-
                         small fishing communities all across          ly dubbed locally grown produce as the
                         Australia, ensuring that they in turn only    Number 1 hot trend this year, it didn’t
                         use sustainable methods of landing their      take long for restaurants to adopt the
A recent survey in the   catch from day boats, using lines, not        practice and bring it mainstream.
                         nets. This eco-friendly way of fishing            For Executive Chef Lorenzo Loseto
 UK for example cited    minimises the damage to the marine            of Toronto’s George, the city and the
  that 90 per cent of    ecosystem, while using only local fish        surrounds inspire his menu at the restau-
                         ensures Kilroy cuts the restaurant food       rant. And that menu changes daily, too, as
 diners are willing to   miles and carbon footprint.                   he opts for a menu that highlights fruits
pay more if they could       For many, this may seem a bit elabo-      and vegetables from local growers and
get restaurants to put   rate for a restaurant just to serve fish.     producers. His day begins with an early
                         But Jellyfish is joining a global movement    morning excursion to the food terminal,
  sustainable fish on    among restarauteurs promoting the sus-        Canada’s largest wholesale fruit and pro-
      their plate.       tainable-farming label in an effort to meet   duce distribution centre, to source for
                         the green habits of today’s health-con-       the freshest and what’s available for the

                                                                           august 2009 | accountants today    57

week. In the summer, Loseto may cook
with lobster from the Atlantic, but when
lobster season is over, he’ll switch to
something more readily available.                                                                 There are also an
    There are also an increasing number                                                          increasing number
of restaurants that have begun to grow
their own fruits and vegetables in the
                                                                                                 of restaurants that
garden for use in the restaurants. At                                                           have begun to grow
Soneva Fushi by Six Senses in Maldives,                                                         their own fruits and
the practice has helped the resort cut
its food miles to zero, in line with the                                                          vegetables in the
resort’s aim to be a carbon positive                                                            garden for use in the
resort by 2010. Similarly at Jogjakarta’s
Losari Coffee Plantation and Resort, the
organic garden is planted with toma-
toes, cabbage and cauliflower that make
their way to guests’ lunch and dinner,
while organic tropical fruits such as
mango, starfruit and guava are turned
                                                   For Steve Ells, Founder and CEO of         aged restaurant owners to smarten up
into garden-fresh juices. The resort’s
                                               America’s Chipotle, his fast food outlet       on business. Buying local and buying
coffee plantation is also organically-
                                               not only serves up Mexican under 10 min-       seasonal help minimise operations cost
grown, where robusta coffee beans are
                                               utes, but they are also packed with ingre-     and the restaurant’s carbon footprint.
processed not only for coffee, but as
                                               dients that are seasonal, family-farmed,       Even the kitchens of Buckingham Palace
ingredients in the resort’s spa.
                                               naturally raised, hormone-free and/or          are making the switch. Earlier in June,
    Still, it’s not just the restaurants and
                                               organic. Famous for their tagline ‘Food        Queen Elizabeth consented to turning a
resorts that have begun to adopt the
                                               With Integrity’, Ells says that this has got   patch from her palatial palace grounds
sustainable label and/or use of local and
                                               to go beyond simply a marketing slogan.        into an organic vegetable garden. The
seasonal produce. In the US, Pizza Fusion
                                               ”(The tagline) means working back along        garden, the first since the Dig for Victory
has built its reputation as an organic res-
                                               the food chain. It means going beyond          campaign held 60 years ago after World
taurant chain with its pizzas, sandwiches
                                               distributors to discover how the vegeta-       War II, will supply some of the palace’s
and wraps using no less than 75 per cent
                                               bles are grown, how the pigs, cows and         kitchen’s needs. The Queen’s garden
organic ingredients, or bought from local
                                               chickens are raised, where the best spices     follows closely in the footsteps of US
suppliers that practice sustainable farm-
                                               come from. We learn how these factors          First Lady, Michelle Obama, who recently
ing. With the motto “Saving the Earth,
                                               affect the flavour of the finished product.    reaped the rewards of her own presiden-
One Pizza at a Time,” Pizza Fusion’s
                                               And what we can do to improve it.”             tial garden – with the first harvest yield-
approach to food is one that is in its
                                                   Fuel prices hiking the transport cost      ing 36 kilogrammes of produce, including
purest form – untainted by artificial addi-
                                               of imported food and affecting food sales      peppers, spinach, carrots and lettuce.
tives, such as pesticides, preservatives,
                                               earlier this year may have also encour-             Now where’s my spade? n
antibiotics and hormones.

58   accountants today | august 2009

         august 2009 | accountants today   59
lifestyle | TRAVEL

                                       the sound
60   accountants today | august 2009
                             hen you’re known
                             as the theme park

                             capital of the
                             Southern Hemi-
                sphere, it’s really hard to shrug
                                                     But when the scene gets a bit
                off the perception that you’re
                                                     too mardi gras, there is a lesser
                nothing but an endless strip
                                                     known part of Gold Coast that
                of thrills, fun and games. Not
                                                     lets guests bring down the
                that Gold Coast minds that
                                                     pace a notch. the hinterland,
                image much. Surfer’s Paradise,
                                                     Gold Coast’s charming and
                Gold Coast’s gold mine tourists
                                                     serene twin sister, is where
                centre, welcomes four million
                                                     time almost stands still. It’s
                visitors a year, from sun wor-
                                                     a place where coffee can be
                shippers to surf seekers and
                                                     enjoyed, not rushed, over a
                the everyday holidaymaker
                                                     scene of green rolling hills and
                looking for a good time.
                                                     the evening descends not with

of silence
                                                     the thunderous din of a man-
                                                     made machine, but the natural
                                                     sounds of the lush wilderness.

                                                                   Anis Ramli

                                                         august 2009 | accountants today   61

                                                                                                Award Winner at the International Cheese
                                                                                                Festival. This boutique cheese company
                                                                                                still uses traditional methods for their pre-
                                                                                                mium cheese made without preservatives
    Queensla                                                                                    and with vegetarian rennet.
               nders con
   the ideal                sider this                                                               Visitors can watch the cheese mak-
              spot to re
their hom                 tire or ca                                                            ing process in the complex, then buy
            e, where                 ll                                                         the cheese at the shop. Cheese making
 to their g            they can
           ard                    tend                                                          classes are offered from time to time. The
 village fe ens and enjoy the                                                                   stylish wood and glass facility also houses
            el, knowin
  buzz of th             g th
              e city is ju at the
                                                                                                the five-star Bistro & Grill called Liquid
                                                                                                Amber that seats 120. The menu includes
        minutes a         st mere
                                                                                                Moroccan tagine of chicken with sweet
                     way.                                                                       potatoes, dates and preserved lemon.
                                                                                                There is also an outdoor eating area that
                                                                                                lets you sip coffee and nibble on cheese
                                                                                                and crackers or the café’s delectable hot
                                                                                                chocolate pot while viewing the scenic
                                                                                                mountain area.
                                                                                                     To appreciate Mount Tamborine’s
                                                                                                natural wonder, the newest attraction,
                                                                                                the Tamborine Rainforest Skywalk (www.
                                                                                      , is a fun and
                                                                                                quick way to get close to nature without
                                                                                                the hassle of a strenuous trek. A high-
                                                                                                tech and sturdy steel raised walkway
                                                                                                lets visitors explore Mount Tamborine’s
                                                                                                pristine rainforest within the premises of
                                                       The lifestyle is laidback and relaxed.   an 11-hectare privately owned sanctuary.
                                                  Queenslanders consider this the ideal spot    Although the walk takes just under one
                                                  to retire or call their home, where they      hour, bringing guests across crystal clear
                                                  can tend to their gardens and enjoy the       rivers, rock pools, a waterfall and but-
                                                  village feel, knowing that the buzz of the    terfly lookouts, there are sheltered rest
                                                  city is just mere minutes away. There are     areas along the way that lets you admire
                                                  original working farms, where locals buy      the peace and quiet as well as look out for
                                                  milk direct from producers; and where         resident inhabitants. The steel platform
                                                  tourist souvenir shops lack, visitors in-     rises over the middle and upper cano-
       Gold Coast’s hinterland is home to the     stead find themselves wandering around        pies of the rainforest providing you with
   densely forested McPherson Range and           quiet village clusters that are home to
   many national parks. Locals dub the area       talented artisans and crafts people, and
   the ‘green behind the gold’, and rightly so.   artisan-style food.
   Just fourty minutes’ inland from Surfers            The Witches Chase Cheese (www.
   Paradise is the first part of the McPher- draws people             The Tamborine
   son Range, Mount Tamborine, an area            to the mountain for its delicious cheese        Mountain Markets held
   that oozes with charm and tranquility.         made on site. Husband-and-wife team An-          the second Sunday of
   With a local population currently number-      dre and Meredith Morris use the region’s
   ing over 6,000 people, Mount Tamborine         finest milk from Happy Jersey cows for
                                                                                                each month is where guests
   is a pleasant throwback to yesteryear’s        their award winning cheeses that include          can sample the best
   country-style Queensland, and a great          their own version of Camembert aptly               of the community
   way to discover the real essence of this       called Tamembert and the gamey fla-
                                                  voured Washed Rind, a 2008 Gold Medal
                                                                                                        at one place.
   northern Australian state.

   62   accountants today | august 2009
                                                                                                         THE SOUND OF SILENCE

                                                                                                  There’s also some serious shopping
                                                                                             to be done at the mountains. At Eagle
                                                                                             Heights’ main street Long Road, there
                                                                                             are shops that sell handcrafted choco-
                                                                                             lates and handmade fudge, studios that
                                                                                             produce artisan cuckoo clocks, stylish
                                                                                             galleries that create one-off works of art,
                                                                                             jewellery and homeware. In fact, many
                                                                                             city folks, sometimes from as far as Bris-
                                                                                             bane, make the trip to the area to hunt for
                                                                                             unique products and arts and crafts.
                                                                                                  Although Mount Tamborine is eas-
                                                                                             ily accessible from Surfer’s Paradise, the
a spectacular view of the rich flora, and      sitting area for guests to enjoy a cup of     area also has a number of quaint cottages
the walk ends with the amazing 40-metre        coffee while listening to the sounds of the   as well as resorts as choice of accommoda-
Cantilever with views of the creek below       rainforest. Their Mars bar cheese cake is     tion for overnight stays. The luxury wood
and the canopies of rainforest. A natural      also a crowd favourite.                       cabins at Mount Tamborine Seaview Tree-
footpath also lets guests explore the area          For more of the local flavours, hand-    houses ( lets
from a different perspective. Plans are un-    crafts and produce, the Tamborine Moun-       you ‘camp’ in style, with cabins offering
derway to include a night tour.                tain Markets (www.tamborinemountain.          full amenities including luxury bath robes
    The Skywalk was developed by the           net/markets.html) held the second Sun-        and a kitchen with a microwave. The Cot-
Moore family who owns the property.            day of each month is where guests can         tages at Witches Fall (www.witchesfallscot-
Encouraged by their personal attachment        sample the best of the community at  will lure the romantics with
to the land as well as their commitment        one place. Savour freshly ground coffee       its stone gabled façade and raked bamboo
to the environment, and wanting others         then grab a bag with flavours like Bel-       ceilings. Inside however, it’s luxury all
to discover the rainforest canopies in an      gium Cream, Macadamia Nut and Swiss           the way with a full service spa and home
exciting and different way, the Skywalk        Chocolate. Piles of avocados, homemade        baked breads served for breakfast every-
concept was introduced. The Skywalk            preserves, honey and nougat beg to be         day. For the ultimate pampering, guests
was built off-site to minimise impact to the   taken home. There’s plenty of room to         know that there is no better place to stay
rainforest while following the guidelines      wander at your leisure, with stalls that      than at the Songbirds Rainforest Retreat
of the Department of Natural Resources         offer food to be eaten right there at the     ( where morning
and local council. Apart from the Sky-         premises. There’s proffertjes (Dutch pan-     yoga sessions are done amid calls from
walk, visitors can also visit the Rainforest   cakes), fantastic tapenades, baked jacket     the kookoburras and lorikeets while eve-
Eco Gallery, where a collection of inter-      potatoes and fresh corn on the cob. And       nings see them retreat to spacious, well-
pretive panels and photos of sub-tropical      often, there’s a performance on stage, giv-   appointed villas scattered among Mount
rainforest wildlife, including the local       ing the market a festive air. Families too    Tamborine’s emerald rainforest. n
flora and fauna are displayed. There’s         can let their kids roam as they enjoy pony
also the Birdswing Café with an outdoor        rides on the market grounds.

                                                                                                            The Cottages at
                                                                                                         Witches Fall will lure
                                                                                                          the romantics with
                                                                                                       its stone gabled façade
                                                                                                          and raked bamboo

                                                                                                  august 2009 | accountants today    63

Ng Poh Ling


                                                 n 1 June 2009, the US Military launched
                                                 not one, but THREE initiatives into the
                                                 webosphere as part of a new communication
                                                 effort. Two of those are a Facebook page
                                       and Twitter feeds, the other, a YouTube site. Twitter
                                       and Facebook were also instrumental PR tools for
                                       presidential candidates in the 2008 US election.
                                           Not to be left in the dust, our very own MPs –
                                       Khairy Jamaluddin, even DAP stalwart, Lim Kit
                                       Siang - have Twitter accounts as well, tweeting
                                       updates on parliamentary proceedings.
                                           Twitter is a free social networking and micro-
                                       blogging service (posts are kept to a 140-character
                                       limit) that enables users to send and read each
                                       others’ updates, known as tweets. Facebook is a free
                                       social networking site where users connect and
                                       interact by adding on friends, sending messages,
                                       sharing photos and video, updating their personal
                                       profiles and notifying friends about themselves.
                                       YouTube is a video sharing website where users
                                       upload and share videos.
                                           Most recently, Twitter and YouTube did for Iran
                                       what traditional media couldn’t: they served as a
                                       platform for breaking news in a country where
                                       officials had pulled the plug on news organisations

64   accountants today | august 2009
                                                                                                                       TWEET, TWEET!

  covering the presidential election
  controversy. CNN not giving enough air
  time? Enter Twitter as a springboard for
  Iranians to share with the world what was
  happening to their country.
      In part, the social networking
                                               TOP OF THE POPS:
  revolution is soaring way into orbit         ROuNDING uP THE TOP SITES
  because of our increasingly common
  habit of sharing every minutiae of our       Malaysia: FB #3, Friendster #8,
  daily lives with anyone who wants to         MySpace #11, YouTube #4
  know about them. It’s becoming a             Singapore: FB #2, Friendster #10,
  foundation of human culture. We share        Multiply #26, YouTube #4
  what we think (Twitter), what we’re
                                               Indonesia: FB #1, Friendster #8,
  reading (StumbleUpon, LibraryThing),         Multiply #16, YouTube #6                             The appeal of Twitter lies in its
  our finances (Wesabe), our photos                                                             simplicity. It does one thing and only that
  (Flickr), our everything (the Web).The
                                               Thailand: FB #13, Multiply #25, YouTube #4       one thing well: starting a conversation
  Internet is our playground where there       Philippines: Friendster #2, FB #5, Multiply      and knowing that someone out there will
  are more choices and more opportunities      #7, YouTube #4                                   see your message. It encourages you to
  to meet and stay in touch with people we                                                      grab ideas in byte-size chunks and use
                                               united States: FB #3, MySpace #5,
  may or may not know.                         Twitter #14, YouTube #4                          your updates as jumping off points to
      Social media platforms like Twitter                                                       other places or just let others know what
                                               united Kingdom: FB #2, MySpace #15,              you’re up to at any given moment. People
  and Facebook are not only changing the       Twitter #13, Youtube #4
  way we keep in touch with each other but                                                      who love Twitter love the fact that they
  also revolutionising the meaning of                   Source:, as at 1 July 2009    can tap into the collective consciousness
                                                       (Note: Alexa’s rankings change daily.)
  ‘keeping in touch’ and being in the know.                                                     of others on the network, bouncing ideas


  All of a sudden, celebrities like Ashton     THE SOCIAL SPHERE: JuST HOW MANy                 off others whom you would otherwise
  Kutcher and wife Demi Moore are              SOCIAL BuTTERFLIES ARE OuT THERE?                not meet.
  allowing hordes of fans a glimpse into                                                            Facebook appeals to people looking to
  their daily lives via Twitter. Even the
  sports world is becoming obsessed with
                                               founded 2004            13            million
                                                                                                reconnect with old friends and family
                                                                                                members or to discover new friends
  the micro-blogging tool with big names                                                        online. Ideal for social animals, Facebook
  like Serena Williams, Shaquille O’Neal
  and Lance Armstrong among the
                                               founded 2004           200            million
                                                                                     members    beckons you to stick around and
                                                                                                communicate within the network. There
  personalities tweeting regularly. The
  appeal? Getting the word out to their fans
                                               My Space
                                               founded 2003           125            million
                                                                                     members    are loads of things you can do within the
                                                                                                network (share videos, photos, updates
  without the machinations of their media
  spin agents and being able to say their
                                               founded 2006            32            million
                                                                                                and play games) that will keep you
                                                                                                coming back for more.
  piece on their own terms rather than                                                              Established in developed countries
  being portrayed in a certain way by
  different media arms.
                                               founded 2002            90            million
                                                                                     members    like the US, Facebook is now achieving
                                                                                                its fastest growth rate in developing
                                                                Source: Wikipedia

                                                                                                     august 2009 | accountants today    65


     FACEBOOK PROS:                                                     TWITTER PROS:
     nn Most users can quickly grasp the value of                       nn Easy to navigate and update, link to and
         connecting with friends, family and                                promote anything
         established contacts; some people report                       nn Reach far beyond your inner circle of
         they use Facebook instead of email and                             friends
         IM                                                             nn Anyone can follow anyone else unless
     nn More emphasis on deep connections with                              blocked
         others vs. who has the most connections                        nn You don’t have to be logged in to get
     nn Huge, rapidly growing installed user base                           updates; you can just use an RSS reader
     nn Applications galore; find people, make                          nn Pure communication tool; rapid
         connections, email, instant messaging,                             responsiveness
         image/video sharing, etc.
                                                                        TWITTER CONS:
     FACEBOOK CONS:                                                     nn Limited to 140 characters per update
     nn Requires investment of time to realise                          nn Limited functionality; find people, send
         sustained benefit                                                  brief messages, direct replies
     nn More difficult to navigate and update                           nn Not everyone will find it immediately
     nn Less immediate responses; unless you stay                           useful
         logged on continuously                                         nn Easily abused for spam
     nn Requires a user to allow others to                              nn As yet no readily apparent monetisation
         connect                                                            strategy

countries. According to San Francisco                                                           Ultimately, both Facebook and
research group O’Reilly Media,                                                              Twitter are merely communication tools.
Indonesia led the world in new Facebook                                                     They will evolve as users find new ways to
users among countries with at least a                                                       extract value from them. In a rapidly
million users, during a recent three-                                                       evolving social networking space, it
month period. Philippines came in at No.                                                    remains to be seen who will become the
2. In both these countries, users in the                                                    long term winner.
13-25 age group is growing at a faster                                                          With users making up tens of millions
rate than other ages, as compared to the      gathering where almost everyone knows         in numbers, you’d think these social
fastest growing age group of 35 and over      each other. That kind of setting is relaxed   networking platforms would be raking in
in the US. There’s still plenty of room for   and conversations are familiar. The           profit. However, that’s proving to be a
growth in the world’s fourth most             communication style would be similar to       challenge. No matter the phenomenon, if
populated country: less than 2 per cent       Facebook. If you go to a social event         a business is not financially stable, it will
of Indonesia’s vast population is using       where you don’t know most of the people,      eventually fade away, despite its
the service.                                  you use a different communication style.      popularity. It remains to be seen whether
    So which social networking tool is        You want to make yourself known, make         either application has a profitable,
best? The truth is that each will appeal to   an impression, stand out of the crowd and     scalable and sustainable business model
different people and for different reasons.   make new connections. That’s like             or whether the exit strategy is simply to
Let’s say you attend a wedding or social      Twitter.                                      be acquired. n

66    accountants today | august 2009
                                                                                                                                              FEE     CPE
LOC.       DATE          PROGRAMME TITLES                                                       SPEAkER                  VENuE                                REMARkS
                                                                                                                                              (RM)    HOuRS

klang                    Financial Reporting Standard 139: Recognition and Measurement -
           3 & 4 Aug                                                                            Danny Tan Boon Wooi      Concorde Hotel kL    800     16      HRDF Claimable
Valley                   Preparing to Implement
           3 & 4 Aug     Effective Corporate Report Presentation for Accountants                Bryan Ng                 Training Choice kL   1,100   16      HRDF Claimable
           3 & 4 Aug     An Entrepreneurial Approach to Credit Management & Debt Recovery       Dr. Steven Liew          Hilton PJ            700     16      HRDF Claimable
           5 & 6 Aug     Financial Reporting Standards in Malaysia - Salient Features           Danny Tan Boon Wooi      Concorde Hotel kL    800     16      HRDF Claimable
           5 & 6 Aug     key Performance Indicators (kPI) and Performance Management            Dr. krishna              Hilton PJ            800     16      HRDF Claimable
           6 & 7 Aug     Fundamental of Budgeting and Cash Flow Forecasting                     kenneth Tham             Crystal Crown PJ     900     16      HRDF Claimable
           7 Aug         Impairment of Assets                                                   Danny Tan Boon Wooi      Concorde Hotel kL    450     8       HRDF Claimable
                                                                                                Lee Min On and Tan
           12 August     Corporate Governance Guide - Towards Boardroom Excellence                                       Parkroyal kL         650     8
                                                                                                kim Chuan
                                                                                                Prof. Dr. Zainal Azam
                                                                                                                         INCEIF, Menara
           12 August     Shariah Aspects of Business and Finance (Module 1)                     Abdul Rahman &                                1,200   8       HRDF Claimable
                                                                                                                         Tun Razak
                                                                                                Dr. Ahcene Lahsasna
           13 August     Anti-Money Laundering & Anti-Terrorism Financing Act 2001              William Leong            Hilton PJ            400     8       HRDF Claimable
           13 & 14 Aug   Audit Evidence                                                         Janise Lee               Hilton PJ            750     16      HRDF Claimable
                         Financial Instruments: Recognition, Measurement, Disclosure &          Woon Chin Chan & Tan
           13 & 14 Aug                                                                                                   Hilton PJ            1,000   16      HRDF Claimable
                         Presentation                                                           Liong Tong
           17 & 18 Aug   Financial Essentials for Non-Financial Professionals                   Yoga Thevan              Crystal Crown PJ     800     16      HRDF Claimable
                         Financial Reporting Standard 139: Recognition and Measurement -
           17 & 18 Aug                                                                          Danny Tan Boon Wooi      Concorde Hotel kL    800     16      HRDF Claimable
                         Preparing to Implement
           17 & 18 Aug   Public Practice Programme                                              various                  Concorde Hotel kL    850     16
           17 & 18 Aug   Integrating Financial Data and Reports Presentation for Accountants    kok Yee Lan              Training Choice kL   1,100   16      HRDF Claimable
           17 & 18 Aug   Business Writing: Write for Results                                    Lum Woon Foong           Piccolo Hotel kL     800     16      HRDF Claimable
                                                                                                Prof. Dr. Saiful Azhar
                                                                                                                         INCEIF, Menara Tun
           18 August     Islamic Banking Practices (Module 2)                                   Rosly & Dr. Shaikh                            1,200   8       HRDF Claimable
                                                                                                Hamzah Abdul Razak
                         Implementing Quality Control - Incorporating ISQC1 & Practice Review   Janise Lee & Mohd
           19 & 20 Aug                                                                                                   Piccolo Hotel kL     650     16
                         Findings                                                               Noor Abu Bakar
                         Preparing for Convergence: understanding International Financial
           19 & 20 Aug                                                                          Danny Tan Boon Wooi      Concorde Hotel kL    850     16      HRDF Claimable
                         Reporting Standards and International Auditing Standards
                                                                                                Lee Min On and Tan
           20 August     Corporate Governance Guide - Towards Boardroom Excellence                                       Hilton PJ            650     8
                                                                                                kim Chuan
                                                                                                Woon Chin Chan & Tan
           20 & 21 Aug   Preparation of Group Accounts                                                                   Hilton PJ            1,000   16      HRDF Claimable
                                                                                                Liong Tong

           20 & 21 Aug   Optimising Corporate Tax Planning Strategies                           Sivaram Nagappan         Hilton PJ            850     16      HRDF Claimable

           21 August     Deferred Taxation Made Simple                                          Danny Tan Boon Wooi      Concorde Hotel kL    450     8
           24 & 25 Aug   Managing Risks of Forex in International Trade                         Agee Lee                 Hilton PJ            800     16      HRDF Claimable
           24 & 25 Aug   Budget & Variance Analysis Modelling for Accountants                   kok Yee Lan              Training Choice kL   1,100   16      HRDF Claimable
                         Customs Tax Incentives (Exemption) under Section 14.2 Customs Act
           27 August                                                                            Goh kin Siang            Hilton PJ            480     8       HRDF Claimable
                         1967 & Section 10 Sales Tax Act 1972
Northern                                                                                        Lee Min On, Tan kim      Traders Hotel
           5 August      Corporate Governance Guide - Towards Boardroom Excellence                                                            650     8
Region                                                                                          Chuan and Nathan         Penang
                                                                                                                         Traders Hotel
           18 August     Anti-Money Laundering & Anti-Terrorism Financing Act 2001              William Leong                                 400     8       HRDF Claimable

                                                                                                                         Traders Hotel
           27 & 28 Aug   Audit Evidence                                                         Janise Lee                                    750     16      HRDF Claimable

Southern                                                                                        Woon Chin Chan & Tan
         10 August       Fundamental Principles of Deferred Taxation                                                     Mutiara Hotel JB     550     8       HRDF Claimable
Region                                                                                          Liong Tong
                         Financial Instruments: Recognition, Measurement, Disclosure &          Woon Chin Chan & Tan
           11 & 12 Aug                                                                                                   Mutiara Hotel JB     1,000   16      HRDF Claimable
                         Presentation                                                           Liong Tong
                         Implementing Quality Control - Incorporating ISQC1 & Practice Review
           26 & 27 Aug                                                                          Sam Soh                  Puteri Pacific JB    650     16
East       10 & 11                                                                                                       Four Points by
                         Regional Conference 2009                                               various                                       850     16      HRDF Claimable
Malaysia   August                                                                                                        Sheraton, kuching
                                                                                                                         Shangri-La Tg Aru
           24 & 25                                                                              Hari Ramulu
                         Corporate Entity Valuation                                                                      Resort & Spa kota    750     16      HRDF Claimable
           August                                                                               Munusamy
           26 & 27                                                                              Hari Ramulu              Grand Margherita
                         Corporate Entity Valuation                                                                                           750     16      HRDF Claimable
           August                                                                               Munusamy                 Hotel, kuching
                                                                                                                                               FEE     CPE
LOC        DATE           PROGRAMME TITLES                                                       SPEAkER                  VENuE                              REMARkS
                                                                                                                                               (RM)    HOuRS
           1 & 2 Sep      Building Financial Models for Decision-Making                          Bryan Ng                 Training Choice kL   1,100   16    HRDF Claimable
                          Fundamental Reporting and Presentation Standards: Core Reporting       Woon Chin Chan & Tan
           7 September                                                                                                    Concorde Hotel kL    500     8     HRDF Claimable
                          Standards                                                              Liong Tong
                                                                                                 Woon Chin Chan & Tan
           8 September    understanding, Preparing & Presenting Cash Flow Statements (FRS 107)                            Hilton PJ            550     8     HRDF Claimable
                                                                                                 Liong Tong
           14 & 15 Sep    Financial Essentials for Non-Financial Professionals                   Yoga Thevan              Concorde Hotel kL    800     16    HRDF Claimable
                                                                                                 Woon Chin Chan & Tan
           14 & 15 Sep    A Comprehensive Workshop on Deferred Taxation                                                   Hilton PJ            1,000   16    HRDF Claimable
                                                                                                 Liong Tong
                                                                                                 Prof. Dr. Saiful Azhar
                          Islamic Capital Market (Module 3)                                      Rosly & Dr. Mohd Pisal   Concorde Hotel kL    1,200   8     HRDF Claimable
Northern                  Implementing Quality Control - Incorporating ISQC1 & Practice Review                            Traders Hotel
           9 & 10 Sep                                                                            Ooi Chee kun                                  650     16
Region                    Findings                                                                                        Penang
Southern                  Preparing for Convergence: understanding International Financial                                                                   SMIDEC
         1 & 2 Sep                                                                               Danny Tan                Puteri Pacific JB    850     16
Region                    Reporting Standards and International Auditing Standards                                                                           Claimable
           9 & 10 Sep     Financial Essentials for Non-Financial Professionals                   Yoga Thevan              Puteri Pacific JB    800     16    HRDF Claimable
                                                                                                                          Mutiara Johor
           17 & 18 Sep    Audit Evidence                                                         Janise Lee                                    700     16    HRDF Claimable
                                                                                                                          Grand Paragon
           28 & 29 Sep    Public Practice Programme                                              various                                       850     16
                                                                                                                          Hotel Johor Bahru
East       30 Sep &       Preparing for Convergence: understanding International Financial                                Renaissance Hotel                  SMIDEC
                                                                                                 Danny Tan                                     850     16
Coast      1 October      Reporting Standards and International Auditing Standards                                        kota Bharu                         Claimable
                                                                                                                          Shangri-La Tg
           1 & 2 Sep      Audit Evidence                                                         Janise Lee               Aru Resort kota      750     16    HRDF Claimable
                                                                                                                          Four Points by
           3 & 4 Sep      Audit Evidence                                                         Janise Lee                                    750     16    HRDF Claimable
                                                                                                                          Sheraton kuching
           8 September    Anti-Money Laundering & Anti-Terrorism Act 2001                        William Leong            Hilton kuching       400     8     HRDF Claimable
                                                                                                                          Riverside Majestic
           16 & 17 Sep    Practical Accounting Principles & Practices                            kenneth Tam                                   800     16    HRDF Claimable
                                                                                                                          Hotel kuching
                                                                                                                                               FEE     CPE
LOC        DATE           PROGRAMME TITLES                                                       SPEAkER                  VENuE                              REMARkS
                                                                                                                                               (RM)    HOuRS
           25 & 26 Aug    Microsoft Word 2003 (Advanced)                                         tba                      PentaWise Sdn Bhd    270     16
           3 August       Microsoft PowerPoint 2003 (Fundamental & Intermediate)                 tba                      PentaWise Sdn Bhd    150     8

           24 August      Microsoft PowerPoint 2003 (Advanced)                                   tba                      PentaWise Sdn Bhd    170     8

           27 & 28 Aug    Microsoft Access 2003 (Advanced)                                       tba                      PentaWise Sdn Bhd    410     16

           4 & 5 Aug      Microsoft Excel 2003 (Fundamental & Intermediate)                      tba                      PentaWise Sdn Bhd    250     16

           18 & 19 Aug    Microsoft Excel 2003 (Advanced)                                        tba                      PentaWise Sdn Bhd    300     16
           3 August       Networking Fundamental                                                 tba                      PentaWise Sdn Bhd    150     8
           17 August      Analysing Financial Data with MS Excel                                 Chan Phooi Lai           PentaWise Sdn Bhd    500     8

           11 & 12 Aug    Tasks Automation using MS Excel Macro/VBA                              Chan Phooi Lai           PentaWise Sdn Bhd    800     16
           20 & 21 Aug    Microsoft Excel Functions and Formulas                                 Chan Phooi Lai           PentaWise Sdn Bhd    800     16
           10 August      Financial Data Management with PivotTables                             Chan Phooi Lai           PentaWise Sdn Bhd    400     8
           24 & 25 Sep    Microsoft Word 2003 (Fundamental & Intermediate)                       tba                      PentaWise Sdn Bhd    250     16

           1 September    Microsoft PowerPoint 2003 (Fundamental & Intermediate)                 tba                      PentaWise Sdn Bhd    150     8

           28 Sept        Microsoft PowerPoint 2003 (Advanced)                                   tba                      PentaWise Sdn Bhd    170     8

           1 & 2 Sep      Microsoft Access 2003 (Fundamental & Intermediate)                     tba                      PentaWise Sdn Bhd    250     16

           24 & 25 Sep    Microsoft Outlook 2003 (Fundamental & Intermediate)                    tba                      PentaWise Sdn Bhd    320     16

                        MIA Professional Development Centre (MPDC)
                        Malaysian Institute of Accountants
                        Dewan Akauntan, 2 Jalan Tun Sambanthan 3, Brickfields, 50470 Kuala Lumpur
                        Tel: +603-2279 9200 Fax: +603-2273 5167
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